Yours, Mine, and Ours: The Effects of Post-2011 School Finance Reforms on Student Outcomes and the Redistribution of K-12 Education Funding

Abstract

It is a principal interest of the state to provide a quality public education to all students within its jurisdiction, as education at the K-12 level is essential for access to social mobility and other opportunities in adulthood. Significant disparities in the public education system, however, have existed and continue to persist across income lines. A major question in education legislation, then, is whether or not increasing funding to underprivileged schools will enhance students’ academic and economic outcomes. This paper investigates post-2011 school finance reforms, implemented at the state level, to determine if they have any substantive effect on student outcomes and to examine their impact on the redistribution of K-12 public education funding. Through event study analyses, no significant effect on standardized test scores, graduation rates, or teen birth rates is found of school finance reforms in the period from 2011-2022. Redistribution, which would increase low-income school budgets relative to their non-low-income peers, is also unfounded. Substitution effects, where low-income local governments reallocate local funds toward other endeavors after receiving increased state funding for education, are found in both event study analyses and in public school budget reports from several counties, and provide an explanation for this lack of redistribution and the stagnation of student achievement.