AERA Open, Volume 6, Issue 4, October-December 2020.
The U.S. Department of Education made recent technical changes reducing eligibility for the Rural and Low-Income School Program. Given smaller budgets and lower economies of scale, rural districts may be less able to absorb short-term funding cuts and experience stronger negative achievement effects. Kansas implemented a state-level finance change (block grant funding) after 2015, which froze district revenue regardless of enrollment and reduced funding in districts where enrollment increased. Difference-in-differences models compare achievement before and after block grant implementation to estimate effects of funding cuts separately in rural and nonrural districts. Between-state and within-state comparisons offer complementary identification strategies in which the strengths of one approach help address limitations of the other. Revenue/spending reductions are similar by geography but represent a larger fraction of rural district budgets. Results indicate that revenue reductions have larger implications for achievement in rural areas, where they represent a larger proportion of the total budget.