Among the aims of school finance reform is to decouple property wealth and district
spending while maintaining a relationship between local demand for education and local
revenue. To accomplish this policy goal, finance reform often includes variable grant
plans, which come in two forms. “Equalization” grants provide state aid to districts
based on property wealth and income, and “local effort” grants provide state aid to
low-wealth districts with high tax rates (Card and Payne, 2002; Hoxby, 2001; Jackson,
Johnson, and Persico, 2014).2 Importantly, while equalization plans do not affect district
tax effort directly, they may provide incentives for districts to change their tax effort