Does School Capital Outlay Surtax Affect School Infrastructure, Funding, and Performance? Evidence from Florida

• In Event: Examining the equity implications of school fiscal and physical resources and constraints

Abstract

Many studies have shown that schools with better physical learning environments help improve students’ performance. The empirical argument for investing in school infrastructure is growing, although causal evidence on how it affects the conditions and quality of school facilities is still scarce. To address this gap, this paper investigates how school districts utilize increased capital investment to improve and fund their facilities. The paper employs a staggered difference-in-differences design, which exploits the implementation of school capital outlay surtax as a source of exogenous variation in capital funding. The results provide some evidence that school capital outlay surtax leads to an increase in the physical size of school infrastructure by increasing the number of classrooms and reducing class sizes. However, no measurable impact was found on student performance. Furthermore, I find evidence suggesting that the surtax may shift funding from property taxes to sales taxes, as indicated by tax relief in total debt service levies, while discretionary funding sources remain unaffected. I conclude that the positive findings are likely attributable to the surtax rather than other revenue sources. The paper will also include subgroup analysis to evaluate the effectiveness of the surtax and its implications for various types of districts. Additionally, further analyses of other indicators, such as the number of satisfactory student stations in permanent structures, relocatable buildings, and leased facilities, are warranted.

Author

• Yoon-Jung Choi, Florida International University
  Presenting Author