Discussion Paper

Did School Districts Offset State Education Funding Cuts?

Abstract: It’s well known that the Great Recession led to a massive reduction in state government revenues, in spite of the federal government’s attempt to ease budget tightening through American Recovery and Reinvestment Act aid to states. School districts rely heavily on aid from higher levels of government for their funding, and, even with the federal stimulus, total aid to school districts declined sharply in the post-recession years. But the local school budget process gives local residents and school districts a powerful tool to influence school spending. In this post, we summarize our recent study in which we investigate how New York school districts reacted when state aid declined sharply following the recession.

Keywords: State funding; Local Revenue; Education Finance; Property tax;

JEL Classification: Q1; R1;

Bibliographic Information

Provider: Federal Reserve Bank of New York

Part of Series: Liberty Street Economics

Publication Date: 2014-11-10

Number: 20141110