In recent work, we documented the trends over the last two decades in school district use of user fees and charges.  While fee use has grown, and has shown some sensitivity to constraints on traditional revenues created by economic downturns and by tax and expenditure limits, fees have remained a relatively unimportant source of revenue.  What we were not able to establish in that earlier analysis was why school districts have made so little use of fees?  That is the question that will be at the heart of this paper.  In particular, we will ask whether state laws and other institutional constraints on fee use help explain why fees continue to be little used. We will also attempt to explore whether the lack of access to services that lend themselves to pay-for-service activity may be to blame for the failure of school districts to make more use of fees.  And we will document the extent to which districts that, historically, have been more reliant on non-traditional revenues are even more willing to take advantage of these revenue sources when faced with fiscal constraints.

To explore possible explanations for the slow growth in fees, we will focus on trends in fee use in a subset of states that are chosen because they vary in the extent to which fee use by schools is permitted, in the extent to which local revenues have been affected by the Great Recession, and in the extent to which fiscal constraints have closed off traditional revenue sources.  Empirical case studies of a few states will allow us to isolate more effectively the extent to which lack of growth in fees is attributable to constraints on the ability to use fees.  These analyses will also enable us to provide a clearer indication of what district attributes contribute to differential growth in fee use.  And, by focusing on individual states, we can better account for initial heterogeneity in the mix of revenues used to finance schools.  The core data for this analysis will be the F-33 data that are part of the National Center for Education Statistics Common Core of Data (CCD).  These data will enable us to create a consistent picture of fee use in the states we consider.  Where relevant, we will supplement these data with state administrative data that allow us to create a richer picture of the use of fees and other alternative revenue sources.  In addition, we will draw on both the Census and the American Community Survey to supplement the demographics available in the CCD and to provide a relatively rich picture of the characteristics of districts that make heavy and light use of alternative revenues.