Impacts of School Choice Expansion on Public School Finance, Inputs, Voter Tax Preferences, and Achievement

School choice can theoretically improve student outcomes with cost efficiency through competition. But empirical research on school spending is inconclusive, and little rigorous work confirms the conceptual link between privatization and increased competition in K–12 education with enthusiasm for public goods and the tax policies they require. We thus investigate Indiana, where in 2011 state policymakers implemented a private school voucher program and expanded the number of charter school authorizers. Analyzing unique information on public school finance, operational inputs, student achievement, and voter tax preferences with a difference-in-differences approach, we find that districts highly exposed to choice decreased expenditures and could not commensurately counteract shrinking revenues through local property tax referenda. Furthermore, short-term achievement gains reversed and became substantially negative over time.