The Short-Term Effects of the Shift From Prior-Year to Current-Year Enrollment on School Inputs in Arizona

Abstract

Arizona shifted to using current-year enrollment, instead of prior-year enrollment, as the basis for determining state aid for school districts following the passage of Arizona Education Finance Amendment (AEFA) in 2017. This study examines the short-term effects of AEFA implementation on school inputs—namely, expenditures and district personnel, particularly teachers. We find that the average district does not seem to respond to AEFA. However, our heterogeneity analyses reveal that the highest-income districts significantly reduce more inputs than the lowest-income districts in response to AEFA. The differential impact between these two groups is most evident in instructional expenditures, administration expenditures, total full-time equivalent teachers, and particularly teachers with 1–5 years of experience.