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School District Responses to Matching Aid Programs for Capital Facilities: A Case Study of New York’s Building Aid Program

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  • Wang, Wen
  • Duncombe, William D.
  • Yinger, John M.

Abstract

States are financing a larger share of capital investment by school districts but little is known about how districts respond to facility aid programs. Our paper addresses this gap in the literature by examining how a short-term increase in the matching rate for the Building Aid program in New York affected district capital investment decisions. We estimate a capital investment model and find that most districts are responsive to price incentives but that price responsiveness is related to the fiscal health and urban location of the district. Drawing on these results, we provide recommendations for the design of capital investment aid programs to increase their effectiveness in supporting high-need urban districts.

Suggested Citation

  • Wang, Wen & Duncombe, William D. & Yinger, John M., 2011. "School District Responses to Matching Aid Programs for Capital Facilities: A Case Study of New York’s Building Aid Program," National Tax Journal, National Tax Association;National Tax Journal, vol. 64(3), pages 759-794, September.
    • Handle: RePEc:ntj:journl:v:64:y:2011:i:3:p:759-94
    DOI: 10.17310/ntj.2011.3.01
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    Cited by:

    1. Harvey Galper & Kim Rueben & Richard Auxier & Amanda Eng, 2014. "Municipal Debt: What Does It Buy and Who Benefits?," National Tax Journal, National Tax Association;National Tax Journal, vol. 67(4), pages 901-924, December.
    2. Tae Ho Eom & William Duncombe & Phuong Nguyen-Hoang & John Yinger, 2014. "The Unintended Consequences of Property Tax Relief: New York’s STAR Program," Education Finance and Policy, MIT Press, vol. 9(4), pages 446-480, October.
    3. Rajashri Chakrabarti & Max Livingston & Joydeep Roy, 2014. "Did Cuts in State Aid During the Great Recession Lead to Changes in Local Property Taxes?," Education Finance and Policy, MIT Press, vol. 9(4), pages 383-416, October.
    4. Jorge Martinez-Vazquez & Andrey Timofeev, 2014. "Capital Infrastructure and Equity Objectives in Decentralized Systems," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1410, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    5. Phuong Nguyen-Hoang & Yilin Hou, 2014. "Local Fiscal Responses to Procyclical Changes in State Aid," Publius: The Journal of Federalism, CSF Associates Inc., vol. 44(4), pages 587-608.

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