Abstract
Following the financial meltdown and the fallout of the Great Recession, California State and local governments have been forced to limit funding across the board, including consistent and timely funding to California public school districts. In 2011, out of over 1,020 school districts in California, 163 school districts, almost 16%, had inadequate or potentially inadequate budgets to meet that year’s financial obligations. The impact of district financial insolvency on student achievement has not been quantitatively examined. The following thesis measured the impact this insolvency has on student achievement. Utilizing regression analysis, five years of data from the 2005-2006 through 2009-2010 school years were examined. These data included the Academic Performance Index data set, the Certificated Salaries and Benefits data set, and a variable created from the information provided by the California Department of Education’s Interim Status Reports. After controlling for a district’s previous year’s achievement level, student characteristics of the district, social characteristics of the district, and district enrollment and personnel characteristics, I found that fiscally insolvent districts did not have lower levels of growth in achievement. As such, the impact of fiscal insolvency is likely being mediated both by time and by dedicated personnel at the school level. Two of the most interesting findings were that emergency credentialed teachers have a negative impact on student achievement, and salary increases for teachers have positive effects on student achievement. Despite the finding that fiscal insolvency may not directly impact student achievement, the increased fiscal instability of school districts in recent years mandates that additional research be done to both understand the impacts that insolvency is having and how to prevent insolvency in the future. In addition, this research design only looked for immediate impacts, and not impacts that developed over several years, insolvency’s effect on achievement may be somewhat delayed as the causes and effects trickle down to the classroom level.