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School Finance Litigation, Tax and Expenditure Limitations, and Education Spending
Author(s) -
Blankenau William F.,
Skidmore Mark L.
Publication year - 2004
Publication title -
contemporary economic policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.454
H-Index - 49
eISSN - 1465-7287
pISSN - 1074-3529
DOI - 10.1093/cep/byh010
Subject(s) - economics , public economics , government (linguistics) , state (computer science) , inequality , state government , local government , government spending , political science , public administration , market economy , mathematical analysis , linguistics , philosophy , mathematics , algorithm , computer science , welfare
Since the early 1970s, litigation in many U.S. states has led to education finance reform. Over the same period, many states have imposed new tax and expenditure limitations (TELs) on local governments. The imposition of a TEL may alter how local and state education expenditures change subsequent to court‐mandated decreases in spending inequality. Similarly, the effectiveness of TELs in limiting local education expenditures may be influenced by reform. To better evaluate the effects of reform and TELs on education spending, this article considers them jointly and finds that reform has a negative effect on local own‐source education expenditures only in the presence of TELs. In the absence of court‐ordered reform, TELs decrease own‐source expenditure, but the effect is less pronounced than when TELs are present with reform. When both are present, state government spending on education is higher. Also TELs and court‐ordered reform independently increase state government spending on education. (JEL H72 , I22 )