Robert D. Buschman

Economic Conditions and State and Local Education Revenue

This article uses information on state and local education spending from 1989–1990 through 2005–2006 to examine the impact of economic conditions on the pattern of real revenue per student. We find that typical economic and other observable education demand determinants are significant in explaining the pattern of real revenue per student before and after the 2001 recession. We also find that there is no economically significant change in how governments responded to economic conditions after the 2001 recession. Finally, our results provide strong evidence that local governments attempted to offset state declines in revenues by increases in local revenues.

An Exploration of Differential State Responses to Changes in Fiscal Conditions

This paper explores legislative tax changes adopted by states in the face of exogenous budget gaps (projected deficits or surpluses) over the period 1999–2011. Our conceptual framework is based on the premise that states will respond differently to temporary budget changes than to permanent changes. The framework suggests four sets of explanatory factors beyond the size of the budget gap in explaining legislative tax changes, namely the other fiscal options for addressing the gap, the nature of political party control of state government, budgetary institutions, and socio-economic characteristics of the state. We find supportive evidence of our hypotheses that legislative tax changes are affected by a states budget gap, reserves, debt, unified political control, and super majority rules for tax increases, but not by balanced budget rules or changes in expenditures.