School finance reform: Assessing general equilibrium effects

School finance reform: Assessing general equilibrium effects

In 1994 the state of Michigan implemented one of the most comprehensive school finance reforms undertaken to date in any of the states. Understanding the effects of the reform is thus of value in informing other potential reform initiatives. In addition, the reform and associated changes in the economic environment provide an opportunity to assess whether a simple general equilibrium model can ...

The Effect of School Finance Reform on Population Heterogeneity

This paper tests whether state school finance reform alters neighborhood income homogeneity. One implication of the Tiebout model is that within-community homogeneity declines as a result of an exogenous decrease in the ability of jurisdictions to set local tax and expenditure levels. The property tax revolt and the school finance equalization reform of the 1970s and 1980s offer a test of the r...

School Finance Reform in Michigan: An Analytical Framework

We examine whether the Michigan school funding reform of 1994 had general equilibrium effects in the Detroit metropolitan area. The reform had two components: centralization of school funding at the state level, with increases for low-revenue districts and revenue caps for highrevenue districts, and property tax reduction. We present a stylized equilibrium model whose main insight is that since...

Balancing Conflicting Policy Objectives: The Case of School Finance Reform

Estimating the effects of school finance reform: a framework for a federalist system

This paper models the effect of increased state involvement in school funding on education spending levels. Unlike previous studies that have assumed perfect sorting of voters into districts by income, this analysis assumes demand sorting. I, thus, am able to utilize the true distribution of wealth across districts to estimate tax price changes and to predict changes in district spending levels...