School districts in the United States often borrow on the municipal bond market to pay for capital projects. Districts serving economically disadvantaged communities tend to receive lower credit ratings and pay higher interest rates. To remedy this problem, twenty-four states have established credit enhancement programs that promise to repay district debt when a district cannot do so, thereby enhancing the district's credit rating. With a generalized difference-in-differences approach, I rely on cross- and within-district variations to estimate the effect of state enhancement on district bond interest rate, per-pupil capital spending, and student performance. State enhancement reduces district bond interest rates by 6 percent and increases per-student capital spending by 2 percent to 7 percent. It also reduces the disparity in the interest rate and capital spending across districts serving lower- and higher-income families, with no discernible effect on test scores. I find no evidence that the amount of enhanced school debt is associated with significant changes in interest rates paid by state governments. Districts in states without such programs could have achieved cost savings in the range of $383 million to $1 billion from 2009 to 2019 had the states adopted similar programs.

Between 1999 and 2018, 210 shootings have occurred on public school campuses in the United States. The increased need for security and student support may crowd out instructional resources post-shooting. Shootings may also cause students, especially those from socioeconomically advantaged backgrounds, to move away, leading to declines in enrollment. Both changes in the budget allocation and the student composition could exert a negative impact on achievement. First, we examine the effects of campus shootings on public school districts’ revenue, expenditure, debt, and staffing using a long panel of district-year data. Results from event study and difference-in-differences analyses indicate that shootings increase per-pupil spending by $248, which is funded primarily through increased federal transfers. Most spending increases occur in noninstructional functions, such as pupil support services, and capital projects, but they do not crowd out instructional spending. Using school-level data, we show that shootings are followed by a decline in enrollment, driven almost exclusively by reductions in students who do not receive free or reduced-price lunch. Private schools in the area also experience enrollment drop. In sum, despite the increased intergovernmental transfers, campus shootings reduce the desirability of the community and lead to the exit of relatively well-off families.