The Impact of Georgia’s Education Special Purpose Local Option Sales Tax on the Fiscal Behavior of Local School Districts

Eric J. Brunner and David J. Schwegman

National Tax Journal, 2017, vol. 70, issue 2, 295-328

Abstract: We examine the impact of Georgia’s 1997 adoption of the Education Special Purpose Local Option Sales Tax (ESPLOST), which allows districts to impose a 1 cent sales tax to fund capital outlay projects or retire previously incurred debt, on the fiscal outcomes of school districts. We find that ESPLOST adoption caused an increase in per-pupil capital and current spending and a decline in per-pupil debt and property tax burdens among metro-area districts. For non-metro districts, we also find that ESPLOST adoption caused an increase in capital spending but only mixed evidence on whether it increased current spending, and no evidence that it reduced long-term debt or property tax burdens.

Date: 2017
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