Funding, Investment, and Wealth Equalization Across Texas Public School Districts
43 Pages Posted: 12 Feb 2022
We study how Texas school districts respond to funding changes under a wealth equalization policy using an instrument to exogenously identify funding changes. We find that property-rich districts, which have a high likelihood of having new funds recaptured by the state, reduce their tax rates and issue debt for capital expenditures. In contrast, when property-poor districts receive funding, they employ additional teachers with more experience and higher credentials. These results imply that tax and transfer schemes should be designed considering behavioral responses and funding needs.
Keywords: Education Funding, Equity, Oil Funding, Tax Incentives, Texas Public Schools
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