Abstract
In 1995, the Michigan state government centralized a school finance system by removing local discretion on school revenue. The theoretical framework says that centralization has the price and income effects on the pivotal voter’s demand for school spending, probably reducing overall spending levels. Using the district-level panel data on school finance in Michigan and neighboring states for the period of fiscal year 1990-2004, this paper provides evidence for the effect of the Michigan school finance reform on the level of school revenue and spending. The study finds that the reform decreases the level of school revenue and spending with a time lag at the state level. The results also suggest that the reform equalizes revenue and spending among school districts at the expense of high-revenue district’s resources without a large increase in low-revenue district’s resources.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
