Political markets, property tax referenda, and local school spending

For better or worse, fiscal decisions made through property tax referenda allow local political markets to work. Demand, supply, and voting process components of such markets are estimated for those Oregon K-12 school districts that held referenda between 1981 and 1986. Various attributes of the median voter were related to school spending, but supply decisions by school boards and administrators were also important. Large districts used state aid to substitute for local property tax revenues on nearly a one-for-one basis, while relying on reversion budgets (inadequate property tax bases and implicit threats of school closures) to extract greater-than-desired spending levels from the median voter.     

Local Government Responses to Fiscal Stress: Evidence from the Public Education Sector

This article investigates local government responses to fiscal stress through the lens of the K–12 public education sector, examining two major policy options available to school districts for managing fiscal hardship: (1) cutting costs, especially through layoffs, and (2) raising revenues locally through voter referenda. The article employs district‐level administrative and survey data from California and Indiana to examine whether school districts exhibit features of a rational or natural system—in which their behaviors largely reflect fiscal pressures only—or whether they exhibit features of an open system in which nonfinancial factors also shape responses. In Indiana, district fiscal characteristics explain differences in cost‐cutting and revenue‐raising behaviors; there is little empirical evidence that school districts exhibit features of an open system. In California, both fiscal and environmental attributes, including poverty characteristics, average student achievement levels, and the enrollment of English learner students, explain school district behaviors.     

What Types of School Capital Projects are Voters Willing to Support?

In many states, investments in school capital must be approved by bond referenda. Consequently, voter preferences can directly impact the quality of school facilities and their infrastructure. Researchers have often analyzed the causal mechanisms of referendum passage, but they have not examined whether the type of capital project affects the outcome of the referendum itself. In this paper, we use data from the state of Michigan to examine whether voters are willing to provide more or less support for specific types of capital investments. We focus on the relationship between voter support for maintenance versus the construction of a new building or additions to existing buildings. Our analysis suggests there is a higher approval rate for maintenance of existing facilities than the construction of new school buildings or additions.     

Election Timing,Electorate Composition,and Policy Outcomes: Evidence from School Districts

There is considerable debate about how election timing shapes who votes, election outcomes, and, ultimately, public policy. We examine these matters by combining information on more than 10,000 school tax referenda with detailed micro‐targeting data on voters participating in each election. The analysis confirms that timing influences voter composition in terms of partisanship, ideology, and the numerical strength of powerful interest groups. But, in contrast to prominent theories of election timing, these effects are modest in terms of their likely impact on election outcomes. Instead, timing has the most significant impact on voter age, with the elderly being the most overrepresented group in low‐turnout special elections. The electoral (and policy) implications of this effect vary between states, and we offer one explanation for this variation.     

Does restricting choice in referenda enable governments to spend more?

If school boards represent the preferences of the median voter, referendums to approve school expenditures should not constrain school expenditures. If school boards would choose expenditures larger than the median voter’s preference, referendums that restrict voters to approving or disapproving a school board’s recommended expenditure level will result in expenditures larger than the median voter would prefer. However, Florida used a unique referendum system which guaranteed the median voter’s most preferred outcome. Using Florida education expenditures as a benchmark, the evidence suggests that spending was slightly higher in restricted choice referendum states than in Florida.     

Providing Adequate Educational Funding: A State–by–State Analysis of Expenditure Needs

While school finance research and litigation has traditionally focused on the equity of funding across school districts, courts and policy makers are increasingly addressing the adequacy of educational resources. This article reviews recent developments in adequacy research and estimates the additional expenditures required to achieve adequacy across states. Using the cost–adjusted national median of current per–pupil expenditures as a benchmark for adequacy, the results suggest that additional spending of $15.6–18.5 billion is needed nationally to reach the benchmark in all districts. The additional spending would be concentrated in a small number of states, particularly in urban and urban fringe districts.     

Shifting Priorities: Participatory Budgeting in New York City is Associated with Increased Investments in Schools,Street and Traffic Improvements,and Public Housing

ABSTRACT

In participatory budgeting (PB), residents instead of public officials decide how public money is spent. PB may reveal that residents prioritize different investments than public officials, which could lead to more socially just spending. However, little research has examined whether and how PB shifts spending priorities. This study leverages publicly available records on New York City council districts’ capital project allocations over ten years (2009 through 2018), comparing spending within and across PB and non-PB districts. Multi-level regression models show that, on average, when council districts adopted PB, greater proportions of their discretionary capital budgets were allocated to schools, streets and traffic improvements, and public housing. PB was associated with decreases in spending on parks and recreation projects and housing preservation and development projects. The article shows that priorities shift when residents are directly involved in budgeting. Implications for equity and community well-being, and directions for future research are discussed.     

The Downsian model of electoral participation: Formal theory and empirical analysis of the constituency size effect

This paper applies a game-theoretic model of participation under uncertainty to investigate the negative relationship between constituency size and voter turnout rates: theconstituency size effect. We find that this theoretical model accounts for almost all of the variation in turnout due to size in cross sectional data from school budget referenda.     

A distributional theory of government growth

This article presents a closed form solution for time-consistent taxation and public spending in a dynamic game between government and median voter. Extending Meltzer and Richard’s static analysis of government size the article offers a theory of growth of government. At low stages of economic development the median voter, identified as a relatively poor worker, prefers to have no or only small redistributive taxation in order to foster savings. Through this channel he expects improvements of his labor productivity and wage. At higher stages of development, however, when capital is relatively abundant and prospects of further labor productivity gains through capital accumulation are smaller, the incentive to tax and redistribute income rises. Yet, in line with previous work on growth and infrastructure spending the median voter prefers a constant share of productive public spending at all times. Hence, government growth is solely driven by an expanding welfare state.     

Strategic Spending: Does Politics Influence Election Administration Expenditure?

Recently, election administration has been an important part of the national and global conversation about the results of elections. The important issue of election administration spending has not been examined extensively, and the influence of politics on election administration spending levels has not been examined in the United States. While theories of voter turnout and policy preference suggest that politics should influence election administration spending levels in the counties that administer elections, to our knowledge, there has been no evidence produced to support a partisan election administration expenditure effect. This research finds that Republican county commissions in North Carolina spend significantly less on election administration once the county electorate is a sufficient Republican majority. The article presents a novel model and method for estimating election administration spending and calls for additional research to examine the outcomes of these significant differences in spending on election administration.     

State involvement in limiting textbook choice by school districts

Who gets to decide what textbooks are used in America’s public school classrooms varies by state. States can let each school district decide, provide standards that must be followed and make available an incomplete listing of books meeting those standards, or allow schools to choose books only from a list provided by the state. I present a model that provides an explanation for state limits on textbook selection by school districts. I examine the roles played by decision making costs, effectiveness of voters, religious composition, power of teachers, and propensity of state governments to interfere with or to help districts in textbook selection policies at the state level. There has been virtually no research on this topic. My findings corroborate the extant literature that addresses interference by state governments in local affairs and extend the morality politics literature by finding a strong link between religious fundamentalism and state-level policies. I also find that state book lists are less likely (1) in more educated states, where voters are better able to select the most appropriate textbook, (2) in states with smaller school districts, where voters are more involved in the schools, and (3) in states with stronger teacher unions, giving teachers more power in textbook selection.     

Testing political economy’s ‘as if’ proposition: is the median income voter really decisive?

Recent empirical and normative analysis of local government fiscal performance has made good use of the Downsian median voter model as a behavioral specification for how local fiscal allocations are decided. The central assumption behind all these studies is that the median voter is the family with the median income. This paper statistically tests the validity of this assumption for a sample of 58 Long Island school districts. For at most 1/4 of the districts can we reject the assumption, and even for these districts, the predictive bias of the median-income-voter-as-decisive assumption never exceeds 20%.     

The road to power: partisan loyalty and?the centralized provision of local infrastructure

This paper sets out a simple dynamic probabilistic voting model in which a government allocates a fixed budget across electoral districts that differ in their loyalties to the ruling party. The model predicts that the geographic pattern of spending depends on the way the government balances long-run ??machine politics?? considerations and the more immediate concern to win over swing voters. Empirical results obtained from a panel of electoral districts in Québec provide robust evidence that districts which display loyalty to the incumbent government receive disproportionately more spending, especially close to an election, at odds with the standard ??swing voter?? view.     

STATE FINANCE AND TAXING POLICIES

The states have moved through three distinct periods in finance and taxing policies. First, until the 1930s, states dominated over congress in taxing powers. During the Great Depression, many programs were initiated which involved the states in close grant-in-aid arrangements with the federal government. A second period was initiated during the 1960s. when the number of federally-funded grants exploded. States were soon involved in a variety of new responsibilities. This period has now been supplemented by a third, which is characterized by tax reductions and spending limits, often imposed through referenda.     

School Finance Reform's Impact on New Jersey's State Spending Priorities

The combination of school finance reform, voter opposition to higher taxes, and rising costs forced the state of New Jersey to reorient its spending priorities. This article presents an analysis of budgetary data for the period FY 1990 to FY 1996, which clearly indicates that: 1) state resources were shifted from direct state services to state aid; 2) even though the 1991 sales and income tax hikes were revoked, the state's tax structure was more progressive in 1996 than in 1990; 3) Governor Florio's attempts to level down per pupil expenditures by reducing payments to wealthy school districts were largely stymied; 4) the proportion of state resources allocated to public education was lower in FY 1996 than the year preceding school finance reform; 5) because of education's reduced budget share, efforts to level up per pupil expenditures were severely circumscribed; and 6) state aid was diverted from homestead rebates to municipal aid.     

The 2003 and 2015 Constitutional Referenda in Rwanda: A Significant Change in Voter Turnout

Data on voter turnout and choice at the Rwanda’s 2003 and 2015 constitutional referenda were acquired and analyzed. The results revealed contrasting changes in voter turnout between diaspora and in-country electorate. Arguably, at home, lack of freedom on the part of registered voters to make independent choices may explain the 9.3 percent and 5.2 percent increase in voter turnout and “yes” vote, respectively. On the other hand, while the repressive arm of the regime can reach Rwandan citizens both at home and abroad so as to compel them not oppose its political agenda, voters in diaspora enjoy some level of relaxation, especially those staying in Western democracies, which could explain the 37.8 percent drop in voter turnout. The article further argues that the results of the 2003 and 2015 referenda could be used to support suggestions that the Tutsi electorate indeed stands more divided than it was a decade ago.     

An examination of the structure of governance in California school districts before and after Proposition 13

This paper explores the structure of governance in California school districts. Two alternative models are considered, the decisive voter (benevolent dictator) model and a model that allows for rent-seeking behavior on the part of district decision makers. A formal test between these two models is proposed and implemented. The decisive voter model is found wanting as an explanation of school district decision making both before and after the passage of Proposition 13. There is, however, some evidence that the constraints imposed on some districts by Proposition 13 have forced decision makers to act in a manner more consistent with the preferences of their constituents.     

The public choice of educational choice

The very small literature explaining (i) how citizens have voted in two California voucher referenda, (ii) how legislators have voted on voucher bills in the State of Florida and the US Congress, and (iii) the variation across states in charter school provisions is summarized. New empirical evidence documenting the cross-state variation in the success of voucher referenda and voucher bills is examined. Voucher bill characteristics and state characteristics play important roles. Voucher bills have been passed only in the more conservative Republican states, and almost all of the successful voucher programs have been targeted at large, struggling school districts.     

How Local Economic Conditions Affect School Finances,Teacher Quality,and Student Achievement: Evidence from the Texas Shale Boom

Whether improved local economic conditions lead to better student outcomes is theoretically ambiguous and will depend on how schools use additional revenues and how students and teachers respond to rising private sector wages. The Texas boom in shale oil and gas drilling, with its large and localized effects on wages and the tax base, provides a unique opportunity to address this question that spans the areas of education, labor markets, and public finance. An empirical approach using variation in shale geology across school districts shows that the boom reduced test scores and student attendance, despite tripling the local tax base and creating a revenue windfall. Schools spent additional revenue on capital projects and debt service, but not on teachers. As the gap between teacher wages and private sector wages grew, so did teacher turnover and the percentage of inexperienced teachers, which helps explain the decline in student achievement. Changes in student composition did not account for the achievement decline but instead helped to moderate it. The findings illustrate the potential value of using revenue growth to retain teachers in times of rising private sector wages.     

Legislative district configurations and fiscal policy in American States

In accordance with the median voter theorem the median legislator is decisive in representative democracy. If the preferences of the median legislator differ from the preferences of the median voter in the polity, fiscal policy choices will predictably diverge from those favored by the median voter. This paper seeks to identify the median district (and therein the preferences driving the median legislator) in American State legislatures. Using economic characteristics of constituents, we find substantial differences between the median district and the statewide median. As the income of the median district rises above the median income of the polity, government expenditures increase. In addition, the degree to which income is skewed across legislative districts affects spending for redistribution programs. Finally, we find that direct democracy procedures, which allow the statewide median voter to check legislative decisions, limit the impact of differences between the district and polity medians.