Chapter 2 of the Education Consolidation and Improvement Act (ECIA) reduced and redistributed federal aid to education, moving funds from targeted areas of need to all areas regardless of need. States were unable to make up for significant losses in aid sustained by local districts. (TE)

With reference to the case of Ohio, this paper considers whether various types of state grants affect school districts by increasing total spending or by providing tax relief. Regression equations are used to estimate the effects of categorical and general purpose assistance on local tax revenue and on outlays for teacher salaries. (MJL)