Fiscal Crisis, Public Schooling, and Liberal Governance in the 20th Century: A Comparative Look at Taxation and Interest Group Politics

Endorsed by HES and the Western History Association

Thursday, March 30, 2023, 12:45 PM - 2:15 PM

Type: Paper Session

Tags: Business and Economy; Education; Politics


The development of mass schooling was central to state and nation building in the U.S. and internationally in the 19th and 20th centuries. It correlated with a growth in state capacity that required an expansion of public investment and taxation at multiple levels of government. At the end of the 19th century, progressive sensibilities and statist approaches to social policy-making animated strong state-level education agendas and associated increases in taxation in many states. This was accomplished through considerable political convergence among educators, citizens, and business leaders who generally accepted the idea that a first-rate educational system was in the best interest of states, the nation, and citizens. A similar convergence developed in the post-WWII era, from the late 1940s through the early 1970s, when a surge of public investment in education contributed to both overall economic growth and decreased economic inequality, as demonstrated by economic historians. Bookending these periods of increased investment in public schooling were dramatic periods of fiscal crisis that intersected with politics and debates about public school finance. The Panic of 1873 interacted with white supremacy to undercut the educational dimensions of Reconstruction at both federal and state levels, with enduring social, financial, and political consequences. In 1920, the expanded costs of progressive schooling, the new national income tax, and the global hyperinflation of the immediate post-WWI period inspired anti-tax fervor that significantly challenged and changed school taxing structures, civic capacity, and governance in many states. The progressive-era convergence of political interests around education policies fractured, fomenting conflicts between newly forged anti-tax, anti-government forces and social spending advocates that intersected with racist vigilantism and immigration policies of the 1920s. In the 1970s, fiscal crises intersected with white resistance to desegregation and to the civil rights anti-poverty agendas of the 1960s, resulting in severe challenges to school district budgets and authority, interest group formation, and social activism that focused in new ways on influencing education policy and related taxation. Fiscal statecraft in the 20th Century was shaped by revenue needs and the politics of economic justice, civic identity, administrative capacity, and public power. This panel explores the relationship between fiscal crises and public education across the 20th Century in several regions of the United States. The first paper examines the significance of school funding in the reconfiguration of state political dynamics in California and Washington circa 1920, where school tax policy fomented a new and distinctly western conservatism that intersected with western gender, race, labor, and immigration politics. The second paper focuses on dynamics of public school funding in post-WWII North Carolina, where educators and community members fought to develop policies that would equalize school resources between rural and urban schools, as shaped by the long history of the southern racial state. The third paper focuses on the Chicago metropolitan area, where the 1970s fiscal crisis intersected with school reform politics in subsequent decades to shape policy development around issues of segregation, equalization, and local control.

Papers Presented

School Tax Policy and the Reconfiguration of Politics in the “Progressive” U.S. West, circa 1920

This jointly-written paper focuses on state political dynamics in California and Washington circa 1920, when major popular and legislative initiatives aimed to transform school tax structures and governance in the two states. Prior to 1920, a progressive sensibility and strongly statist approaches to social policy-making animated strong progressive education agendas in California and Washington with considerable political convergence among educators, settlers, and business leaders. By 1920, however, expanded costs of progressive schooling, the new national income tax, and global hyperinflation fractured that convergence and inspired anti-tax fervor that took a dramatic form at the state level. It also inspired new coalitions of anti-tax, anti-government forces and new strategies among social spending advocates, including streamlined educator organizations. Historians have highlighted significant shifts in education politics at the end of the 1910s, but have focused primarily at the municipal level, on particular urban case studies, or on the rhetoric of reform, with less attention to underlying economic dynamics or larger political interests that influenced state fiscal policy. This paper analyzes school tax policy as a harbinger of longer-term economic and political development, focusing on political interest formation and organizing within and across states. Drawing on archival sources from political interest groups as well as state records, it reveals how school tax policy fomented a distinctly western conservatism that intersected with western gender, race, labor, and immigration politics. It also takes initial steps toward charting the changing relationships between school spending, business cycles, and debt crises in the early 20th century.

Presented By
Joan Malczewski, University of California, IrvineNancy Elizabeth Beadie, University of Washington

School Finance as a Legacy of Jim Crow: Educational Inequality in North Carolina, 1901-2018

Through a study of public education in North Carolina, this paper examines systemic discrimination in state and county allocations to school districts to show that racism in school finance lasted well beyond the era of legal segregation. Using archival sources at the state, county and school district levels, I provide a quantitative analysis of discriminatory school funding policies over the course of the 20th century. While previous framings of school finance inequality have addressed the issue of funding schools through property tax as one that compounded existing inequalities, I designate the engineering of unequal tax bases and the disproportionate investment of state and county funds towards White schools as part of a regime that constructed unequal wealth between White people and people of color. In Robeson County, for example, the Board of Elections excluded Black and Native American residents from voting in school board elections until 1976, so that they could not elect the people who held authority over school budgets. County commissioners in Robeson also gerrymandered school district lines in order to maximize the tax bases of White school districts. Such local decisions impacted individual and collective wealth in the county and shaped school budgets. I identify such policies as instances of capital theft to stress the historical continuities between Jim Crow and school finance discrimination in the second half of the 20th century, and highlight that the permanent crisis of school funding can only be understood in its racial context.

Presented By
Esther Cyna, Université de Versailles-Saint-Quentin-en-Yvelines

The Manufactured Fiscal Crisis and Neoliberal Solutions in Chicago Public Schools

In the winter of 1979-80, Chicago Public Schools (CPS), experienced a fiscal crisis so severe that the district nearly went bankrupt: it missed multiple payrolls, defaulted on vendor payments, lost its ability to borrow money, and stood on the brink of closing entirely. To resolve the crisis, city and state political leaders and bankers agreed to restructure the district’s debt, impose significant budget cuts, and create a new fiscal oversight agency staffed with business leaders to monitor and approve spending. The fiscal crisis reverberated for decades, reshaping school politics and deepening narratives of CPS failure that were used to legitimate major shifts in school governance and further restrict public spending. This paper explores the CPS fiscal crisis as both a culmination of state tax policies and distributional choices that structurally disadvantaged the district as well as an important moment of change that laid the groundwork for neoliberal education reform. It argues that the CPS fiscal crisis was rooted in decades of state law and policy, including state subsidies and protection of suburban opportunity hoarding and urban disinvestment. Yet the politics and narratives that flowed from the CPS fiscal crisis blamed bureaucratic bloat, self-interested unions, and mismanagement and empowered business leaders and ideas to take a stronger role in education policy, including to pursue market-based reforms and privatization. This story explores the important but often hidden role that tax policies played in both the construction and uses of fiscal crisis to reshape education and legitimate neoliberal ideas and policies.

Presented By
Tracy L. Steffes, Brown University

Session Participants

Chair and Commentator: Isaac Martin, University of California - San Diego
Isaac William Martin is a professor of Urban Studies and Planning at the University of California – San Diego. He is the author of numerous books and articles on housing policy, municipal taxation, and the political economy of inequality. His books include Foreclosed America (Stanford, 2015), with Christopher Niedt; Rich People’s Movements (Oxford, 2013); and The Permanent Tax Revolt (Stanford, 2008). He is editor of The New Handbook of Political Sociology (Cambridge, 2020), with Thomas Janoski, Cedric de Leon, and Joya Misra; The New Fiscal Sociology (Cambridge, 2009), with Ajay K. Mehrotra and Monica Prasad; and After the Tax Revolt (Berkeley Public Policy Press, 2009), with Jack Citrin.

Presenter: Nancy Elizabeth Beadie, University of Washington
Nancy Beadie is Professor in Educational Foundations, Leadership, and Policy at the University of Washington. Her research focuses on historical relationships among education, economics, and state formation at local, state, national, and international levels. Her current book project, Paramount Duty of the State: Education and State Formation in the U.S., 1846-1912, analyzes the significance of education in federal policy and the process of state (re)formation during a period of national expansion and increasing economic power. Previous publications include Education and the Creation of Capital in the Early American Republic (Cambridge University Press, 2010), and Chartered Schools: Two Hundred Years of Independent Academies in the United States, 1727-1925 (NY: Routledge Press, 2002), co-edited with Kim Tolley, as well as numerous articles in US and international journals. Other projects include: a brief history of civic education in the U.S., co-written with Zoe Burkholder for the National Academy of Education’s Civic Reasoning and Discourse Project (2021); an essay on educational systems in North America, for the Oxford Handbook on the History of Education (2019); and another on federal education policy and the rise of social science research published in the Centennial Anniversary Volume of the Review of Research on Education, 2016. Dr. Beadie served as senior editor of History of Education Quarterly, from 2015-2020. She has also served as President of the History of Education Society (U.S.) and as Vice-President of the American Educational Research Association for Division F (History and Historiography).

Presenter: Esther Cyna, Université de Versailles-Saint-Quentin-en-Yvelines
Esther Cyna is a Visiting Assistant Professor in American History at the Université Sorbonne Nouvelle in Paris. She received a PhD in History and Education from Teachers College, Columbia University, and in American Studies from the Université Sorbonne-Nouvelle, Paris 3 in Paris, France in 2021. Her dissertation, “Shortchanged: Racism, School Finance and Educational Inequality in North Carolina, 1964-1997,” examined inequality in school funding in North Carolina from 1964 to 1997. Her research highlights local, county and state decisions about the distribution of educational funds, and shows that public officials have created and maintained school funding mechanisms that exacerbated inequalities between racial groups to preserve White capital and advantage White communities. In 2021, she received the OAH Louis Pelzer Memorial award for an article on racial discrimination and school finance in 20th-century rural North Carolina.

Presenter: Joan Malczewski, University of California, Irvine
Joan Malczewski is Associate Professor of History in the School of Humanities at the University of California Irvine. Her research focuses on Education, Foundations, Interest Groups, Political Development, Progressivism, and the American South. She is currently a visiting scholar at the Stanford Graduate School of Education, where she is participating in a year-long workshop on Education and the Humanities and conducting research on the American Council on Education and its influence on higher education policy development during the Cold War. Her book, Building a New Educational State: Foundations, Schools and the American South was published by University of Chicago Press in 2016. It examines the dynamic process of black education reform during the Jim Crow era in North Carolina and Mississippi, including the initiatives of foundations and reformers at the top, the impact of their work at the state and local level, and the agency of southerners—including those in rural black communities—to demonstrate the importance of schooling to political development in the South. She has a forthcoming article that focuses on foundations and taxation policy in the South titled “The Larger Gifts of Taxation’: Foundations and Tax Reform in the Jim Crow South,” Journal of Policy History.

Presenter: Tracy L. Steffes, Brown University
Tracy Steffes is Associate Professor of Education and History at Brown University. Her research focuses on the historical development and relationship between education, social policy, and American political development in the United States with particular attention to inequality and federalism. She is currently completing a book project, Shifting Fortunes: Schools, Metropolitan Development, and Inequality in Chicagoland. It explores the mutual constitution of educational and metropolitan inequality in Chicago and its suburbs during the second half of the twentieth century. Her first book, School, Society, and State: A New Education to Govern Modern America, 1890-1940 (University of Chicago Press, 2012), explores the expansion and systemization of public schooling in the early twentieth century as a project of national, yet decentralized, state-building and social welfare.