“School District and Housing Price Responses to Fiscal Stress Labels: Evidence from Ohio", presented by Paul Thompson (Michigan State University).
Fiscal stress labels identify financially troubled school districts and alert residents to their districts overall fiscal health. I examine how school districts and residents respond to receipt of these labels from the state auditor and department of education in Ohio. Labeled districts are required to undergo financial recovery with plans implemented by the district or the state depending on the severity of the label. I find that labeled districts reduce both capital and operating expenditures, with cuts occurring both under recovery plans implemented by the district and those implemented by the state. Labeled districts also raise additional local property tax revenue to offset these budget deficits. In addition, I find that housing prices in these labeled districts are three to five percent lower than similar homes sold in non-labeled districts.
Sponsored by the Economics Department Danforth-Lewis Speakers Series.
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