2023/05/01 by Alex E. Combs, Alex Combs, John M. Foster +2
Economics, Econometrics and Finance · Business, Management and Accounting · Social Sciences · #Housing Market and Economics #Financial Literacy, Pension, Retirement Analysis #School Choice and Performance
paper · doi:10.1086/742128
Inequality in school funding can stem from reliance on local property taxes. While reforms address property value and tax rate disparities, assessment accuracy remains underexamined. We study a property assessment intervention to show how assessments affect school finance inequality. Using difference-in-differences, we find that state oversight reduced underassessment and inequitable assessment variability. Assessed values rose by 42 percent and variability fell by 26 percent. The intervention raised local revenue (particularly in districts unable to freely lower tax rates), reduced state aid that was subsidizing underassessment, and narrowed the revenue gap between rich and poor districts by 15 percent (63 per pupil). Our findings show the importance of accurate assessments and state assessment oversight for school funding inequality.