Chapter 2: Tax Revolts and School Performance

This chapter summarizes research addressing the validity of the argument that constitutional constraints like Proposition 13 could reduce the size of local governments while having little effect on the quality of public education provided. A growing body of research is producing a consistent conclusion, that imposition of tax and expenditure limits results in long-run reductions in the performance of public-school students. The authors provide evidence that reconciles these reductions with the dominant result of the education-production literature: dollars matter little. Some of the unintended consequences of limits are documented, and the implications of these results for the accountability debate are discussed.