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School district and housing price responses to fiscal stress labels: Evidence from Ohio

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  • Thompson, Paul N.

Abstract

This paper examines the effect of the Ohio fiscal stress labeling system on school district outcomes and housing prices. Under this policy, financially troubled districts are labeled and required to implement financial recovery plans. In response to these plans, districts increase local tax revenues and decrease capital and operating expenditures. Although these recovery plans lead to better long-term financial health for school districts, there appear to be some negative impacts on welfare in these districts during the duration of the label. I find that residential home sale prices fall following fiscal stress label receipt, but rise again once the label is removed. These districts also undergo substantial restructuring, including reductions in enrollments, teachers, and schools, which coincide with a transitory reduction in math proficiency rates following label receipt.

Suggested Citation

  • Thompson, Paul N., 2016. "School district and housing price responses to fiscal stress labels: Evidence from Ohio," Journal of Urban Economics, Elsevier, vol. 94(C), pages 54-72.
    • Handle: RePEc:eee:juecon:v:94:y:2016:i:c:p:54-72
    DOI: 10.1016/j.jue.2016.05.004
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    Cited by:

    1. Thompson, Paul N., 2019. "Are school officials held accountable for fiscal stress? Evidence from school district financial intervention systems," Economics of Education Review, Elsevier, vol. 72(C), pages 44-54.
    2. Paul N. Thompson & Joseph Whitley, 2017. "The effect of school district and municipal government financial health information on local tax election outcomes: evidence from fiscal stress labels in Ohio," Public Choice, Springer, vol. 170(3), pages 265-288, March.
    3. Hirota, Haruaki & Yunoue, Hideo, 2022. "Fiscal rules and creative accounting: Evidence from Japanese municipalities," Journal of the Japanese and International Economies, Elsevier, vol. 63(C).
    4. Thompson, Paul N., 2019. "Does a Day Lost Equal Dollars Saved? The Effects of Four-Day School Weeks on School District Expenditures," IZA Discussion Papers 12698, Institute of Labor Economics (IZA).
    5. Thompson, Paul N., 2017. "Effects of fiscal stress labels on municipal government finances, housing prices, and the quality of public services: Evidence from Ohio," Regional Science and Urban Economics, Elsevier, vol. 64(C), pages 98-116.
    6. Lavertu, Stéphane & Clair, Travis St., 2018. "Beyond spending levels: Revenue uncertainty and the performance of local governments," Journal of Urban Economics, Elsevier, vol. 106(C), pages 59-80.
    7. Lang (Kate) Yang, 2022. "Fiscal transparency or fiscal illusion? Housing and credit market responses to fiscal monitoring," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 29(1), pages 1-29, February.
    8. Siodla, James, 2020. "Debt and taxes: Fiscal strain and US city budgets during the Great Depression," Explorations in Economic History, Elsevier, vol. 76(C).

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    More about this item

    Keywords

    Fiscal stress; School finance; Housing prices; Property taxes;
    All these keywords.

    JEL classification:

    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • I2 - Health, Education, and Welfare - - Education
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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