Are school officials held accountable for fiscal stress? Evidence from school district financial intervention systems

Abstract

Performance accountability systems have generally been used as a way to provide salient information to citizens regarding school district performance, enabling voters to make more informed decisions at the ballot box. This paper considers the electoral accountability consequences of financial intervention systems, which monitor school district financial health and intervene in cases of severe financial problems. Examining the Ohio fiscal stress label system, I find that the labels received through this system lead to greater school board member and school administrator turnover, with larger effects found following the most severe label that involves the state takeover of the school district’s financial decision-making. The large turnover effects for school boards after the state takeover appear to be driven by a decreased voter preference for incumbents after the state takeover. These results suggest that citizens in these school districts are likely placing accountability pressure on school officials more as a result of the sanction (i.e., the state takeover) than the financial information these labels may provide.