Fiscal Impacts and Redistributive Effects of the New Federalism on Michigan School Districts

Abstract

and Taewan Kim Korean Educational Development Institute Using a quasi-experimental time-series design and employing a multiple regression technique, we examined the fiscal impacts and redistributive effects of the recently enacted federal education block grant on Michigan's 525 K-12 school districts. Two important policy questions were addressed: Are resource allocations for targeted school districts likely to be affected by the adoption of different federal grant mechanisms? If so, will there be a shifting of resources away from or toward these districts? We found that the movement to the block grant mechanism resulted in a definite shift of funds away from former Emergency School Aid Act (ESAA) districts, districts with high proportions of poverty children, highly urbanized districts, and large districts toward smaller and rural districts. The implications of these changes in federal policy are discussed.

County Government Choices for Redistributive Services

“…The findings provide several implications regarding county choices for redistributive service delivery. Consistent with prior studies, federal and state involvement promotes redistributive policy outcomes (Bahl, Martinez-Vazquez, and Wallace 2000;Kearney and Kim 1990;Park 1996). However, the current findings reveal that these outcomes are more directly affected by state financial support.…”

“…Among other variables, federal funding for social assistance was shown to positively affect state and local expenditure shares for social services. Supporting empirical evidence also indicates that shifts in federal funding can not only affect the implementation of state and local redistributive policies but also create externalities for existing policies (Kearney and Kim 1990;Benton 1992).…”

“…Existing literature on the political, social, and economic factors of redistributing public goods has taken on two major themes. From one standpoint, scholars have focused on the influences of federal and state funding levels on public policy choices (Bahl, Martinez-Vazquez, and Wallace 2000;Besley and Coate 2003;Kearney and Kim 1990). From another perspective, efforts to explain the existence of redistributive policies have focused on the politics of choice, asserting that the political influences and benefits of the average…”