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Federal Stimulus Aid and School Finance: Lessons from the Great Recession. EdWorkingPaper No. 21-497

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Title: Federal Stimulus Aid and School Finance: Lessons from the Great Recession. EdWorkingPaper No. 21-497
Language: English
Authors: Anglum, J. Cameron, Shores, Kenneth A., Steinberg, Matthew P., Annenberg Institute for School Reform at Brown University
Source: Annenberg Institute for School Reform at Brown University. 2021.
Availability: Annenberg Institute for School Reform at Brown University. Brown University Box 1985, Providence, RI 02912. Tel: 401-863-7990; Fax: 401-863-1290; e-mail: AISR_Info@brown.edu; Web site: http://www.annenberginstitute.org
Peer Reviewed: N
Page Count: 49
Publication Date: 2021
Document Type: Reports - Evaluative
Descriptors: Federal Aid, Economic Climate, Federal Legislation, Educational Finance, School Districts, School District Spending, Expenditure per Student, Funding Formulas, Resource Allocation, Financial Exigency
Laws, Policies and Program Identifiers: American Recovery and Reinvestment Act 2009
Abstract: In 2009, the federal government passed the American Recovery and Reinvestment Act (ARRA) to combat the effects of the Great Recession and state revenue shortfalls, directing over $97 billion to school districts. In this chapter, we draw lessons from this distribution of fiscal stimulus funding to inform future federal intervention in school finance during periods of economic downturn. We find that district spending declined by $945 per pupil per year following the Great Recession, particularly after a stimulus funding cliff when ARRA funding declined. Spending declines varied more within than across states, while stimulus funding was directed to districts through pre-Recession state funding formulae which varied in their relative progressivity. Spending losses were greater in districts serving fewer shares of students qualifying for free or reduced-price lunch or special education services, in districts with higher-achieving students, and in districts with greater levels of spending prior to the Great Recession; declines were unassociated with district's racial/ethnic composition, the share of English language learners, or a district's reliance on state aid. We conclude by identifying different stimulus policy targets and with recommendations regarding the magnitude and distribution of future federal fiscal stimulus funding, lessons relevant to the COVID-19-induced recession and beyond.
Abstractor: As Provided
Entry Date: 2022
Accession Number: ED616810
Database: ERIC
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  Availability: 0
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  Data: In 2009, the federal government passed the American Recovery and Reinvestment Act (ARRA) to combat the effects of the Great Recession and state revenue shortfalls, directing over $97 billion to school districts. In this chapter, we draw lessons from this distribution of fiscal stimulus funding to inform future federal intervention in school finance during periods of economic downturn. We find that district spending declined by $945 per pupil per year following the Great Recession, particularly after a stimulus funding cliff when ARRA funding declined. Spending declines varied more within than across states, while stimulus funding was directed to districts through pre-Recession state funding formulae which varied in their relative progressivity. Spending losses were greater in districts serving fewer shares of students qualifying for free or reduced-price lunch or special education services, in districts with higher-achieving students, and in districts with greater levels of spending prior to the Great Recession; declines were unassociated with district's racial/ethnic composition, the share of English language learners, or a district's reliance on state aid. We conclude by identifying different stimulus policy targets and with recommendations regarding the magnitude and distribution of future federal fiscal stimulus funding, lessons relevant to the COVID-19-induced recession and beyond.
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      – Text: English
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        PageCount: 49
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      – SubjectFull: Federal Aid
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      – SubjectFull: Economic Climate
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      – SubjectFull: Federal Legislation
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      – SubjectFull: Educational Finance
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      – SubjectFull: School Districts
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      – SubjectFull: School District Spending
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      – SubjectFull: Funding Formulas
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      – SubjectFull: Resource Allocation
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      – SubjectFull: Financial Exigency
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      – SubjectFull: American Recovery and Reinvestment Act 2009
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      – TitleFull: Federal Stimulus Aid and School Finance: Lessons from the Great Recession. EdWorkingPaper No. 21-497
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