School District Income Taxes and School Inputs: The Case of Ohio
This study is the first to explore the relationship between school district income taxes and school inputs (expenditures and student–teacher ratios) using Ohio as a case study. The study employed reduced-form expenditure functions on a data panel of 609 school districts between 1990 and 2010. Treating for the endogeneity of school district income taxes, we found that income tax adopters in Ohio spent $0.20 of a dollar of the tax revenue on operating purposes, and they spent four-fifths of this $0.20 on instructional services that were likely to induce gains in student achievement. Also, we found ambiguous evidence on the effect of income tax revenues on student–teacher ratios.