Association for Public Policy Analysis & Management

Panel: School Finance and Equity in the Age of Ambitious School Reform: Evidence from California, Kentucky, and Michigan

(Education)

In recent years, states and districts have implemented policies to improve the quality of schooling (e.g., Common Core standards, teacher evaluation systems, the Every Student Succeeds Act). Policymakers have grown increasingly concerned with creating equitable school finance systems to sustain these reforms, especially in the aftermath of budget cuts due to the Great Recession. While there have been numerous efforts to transform school funding, little is known about the effects of these policies on funding for low-income and rural districts. This panel examines the effects of policies at the federal-, state-, and local-levels aimed at redistributing funding toward districts serving low-income and rural students. Our findings are based on causal and descriptive analyses of restricted data from state agencies and data from publicly available sources including the Common Core of Data, state records of district revenues and expenditures, and program data on subsidies and tax revenue programs. The papers assess the extent to which the flow of funds fulfills reform criteria for equity in school finance. They further address the empirical challenges of using this data to make evaluative claims.

 

The first two papers examine district responses to centralized state finance reform in Kentucky and California. Kentucky is heralded as one of the most “equitable” school finance systems in terms of bridging the funding gap between rich and poor districts. Using 25-years of data, the first paper tracks long-term trends in local education funding in Kentucky, showing increases in state-level funding for poor, rural districts are associated with these districts contributing fewer local dollars to education over time. In 2013-14, California implemented a new Local Control Funding Formula (LCFF) that increased districts’ per-pupil funding levels for educationally disadvantaged students and provided districts with greater autonomy in allocating resources. The second paper explores differential trends in funding, resource allocation, and student achievement for rural and non-rural districts as a result of LCFF.

 

The third paper examines the effects of the Federal Communication Commission’s (FCC) E-Rate program on district funding for Internet connectivity and district expenditures on Internet, school technology, and other digital learning inputs. Digital learning can be a costly approach to education reform that states and districts are unable to finance independently. This paper examines whether a recent transformation of the E-Rate program resulted in greater Internet subsidies for low-income and rural districts in California (one of the largest participating states in the E-Rate program) and incentivized these districts to spend on technology and related instructional inputs.

 

The fourth paper uses mixed-methods to examine the effects of local economic development in rural regions, specifically the operation of wind farms in Michigan, on school district revenues. Wind energy can be an economic boom for rural America, and can increase tax revenues collected for public services. However, this study finds that the development of wind farms in rural Michigan had little effect on school district revenues. The authors attribute the null effect to state redistributive financial polices which reduce state funding for local districts in response to increases in local tax revenues.