Abstract: Little research has examined how K–12 fiscal accountability policies and practices intersect with district finances and student outcomes during periods of economic crises. Employing a critical policy analysis perspective that distinguishes between the concepts of fiscal accountability and fiscal austerity and differences-in-differences and event studies approaches, this study examines the practice of early fiscal intervention in California’s AB 1200 fiscal accountability system during and after the 2008 financial crisis and recession. In particular, the study estimates the relationship between early fiscal intervention, district finances, and student academic outcomes in mathematics and reading and language arts.

Findings suggest that intervention led to significant cuts in per-pupil expenditures, resulted in no increase in state or federal revenues and an increase in local revenues through property taxes, and was negatively associated with student outcomes, especially in reading and language arts and for Hispanic/Latinx students. When taken together, the findings imply K–12 fiscal accountability in California was leveraged to promote fiscal austerity in educational spending during and after the 2008 financial crisis. Implications and policy recommendations are discussed.