State Politics and School Finance

Session Submission Type: Panel

Abstract

Politics and political institutions are fundamental drivers of school funding–and persistent inequities that exist across districts. While state-level reforms often act to reduce funding disparities, they may also exacerbate them. Effective and actionable education policy research requires attention to local and state politics, yet most often, school finance research narrowly considers effects of policy changes. With receding federal involvement in education, should research and policy efforts to improve school funding more carefully consider state politics?  

 

The four papers in this session highlight important but understudied political determinants of school funding. Each explicitly considers the political dynamics and institutions that shape how much funding schools receive, and who pays for these investments. Papers cover state policy, district decision making, and voter behavior. Session participants bring perspectives from a variety of vantage points, including academic and non-academic policy institutions. 

 

The first paper studies the effects of state-mandated ballot language on local school funding elections. In 2019, the Texas legislature introduced a requirement that school bond ballot text ends with “THIS IS A PROPERTY TAX INCREASE”. Using a differences-in-differences design around bond passage rates and a survey instrument, both in Texas and nationally, the authors find that adding such language decreases bond passage rates by about 9 percentage points. 

 

The second paper studies the effects of state-level legislative school funding reforms. While there is a long history of research on court-ordered reforms, there is an important gap around legislative changes, which are required to implement court-ordered reforms. This study conducts a Bayesian changepoint analysis to identify structural breaks in education spending, then performs a targeted search for legislation that substantially affects the funding distribution. Findings indicate that legislative reforms did not redistribute resources by district income but increased funding universally, in contrast with court-ordered reforms. 

 

The third paper studies supermajority requirements for school bond elections. In most states, capital investments are funded through bonds subject to local electoral approval, with ten states requiring a supermajority. The paper builds a structural model of probabilistic voting in school districts to estimate impacts. Voter and district preferences differ substantially, and model estimates indicate that higher supermajority requirements lead districts to propose smaller bonds more aligned with voter preferences. Simulations suggest California’s 2004 reform to reduce supermajority requirements explains roughly one-fifth of its subsequent test score increase. 

 

The fourth paper studies the effects of Washington’s local property tax reforms on the cost burden for public education. Using property tax data from Washington, the paper identifies   large, previously hidden disparities among both students and taxpayers. School districts enrolling higher percentages of students of color and low-income students, on average, levy higher tax rates, but generate fewer revenues per student. The study highlights how state school finance policy efforts require attention to how property taxes affect local communities, and how different types of property taxes interact. 

Collectively, these studies provide broader, policy-relevant insights and evidence on the political dynamics and institutions shaping education funding, at both the state and local levels.

Policy Area

• Politics, Media, and the Policy Process

Secondary Policy Area

• Education

Chair

• Sarah Reber, Brookings Institution

Discussants

• Claire L Mackevicius, University of Oregon

• Vladimir Kogan, The Ohio State University

Individual Presentations

• School Bonds as ‘PROPERTY TAX INCREASES’: The Impact of State-Mandated Ballot Language on Local Elections - Presenting Author: Melissa Arnold Lyon, University at Albany

• Beyond Court Orders: The Fiscal and Academic Effects of Legislative School Finance Reforms - Non-Presenting Co-Author: Christopher Andrew Candelaria, Vanderbilt University; Presenting Author: Kenneth Shores, University of Delaware

• How Political Institutions Shape Education Spending: Supermajority Requirements in U.S. School Investments - Presenting Author: Julien Matthieu Lafortune, Public Policy Institute of California

• The Levy Swap: How Washington’s Property Tax Reforms Shift the Cost Burden for Public Education - Presenting Author: David S. Knight, University of Washington; Non-Presenting Co-Author: Pooya Almasi, Morgan State University

Organizer

• Julien Matthieu Lafortune, Public Policy Institute of California