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The Impact of Debt Limitations and Referenda Requirements on the Cost of School District Bond Issues

Author

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  • Mary H. Harris

    () (Department of Business, Cabrini College)

  • Vincent G. Munley

    () (Department of Economics, Lehigh University)

Abstract

One distinction between the markets for corporate and municipal bonds involves institutional constraints that apply to some municipal bond issues. This research focuses on how public finance institutions, in particular explicit debt limits and referenda requirements, affect the borrowing cost of individual school district bond issues. The empirical model specifies as the dependent variable the true interest cost of issuing debt. The results suggest that the presence of referenda requirements for the approval of annual school district budgets imposes an additional cost for borrowing funds. © 2011 Association for Education Finance and Policy

Suggested Citation

  • Mary H. Harris & Vincent G. Munley, 2011. "The Impact of Debt Limitations and Referenda Requirements on the Cost of School District Bond Issues," Education Finance and Policy, MIT Press, vol. 6(4), pages 537-556, October.
  • Handle: RePEc:tpr:edfpol:v:6:y:2011:i:4:p:537-556
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    File URL: http://www.mitpressjournals.org/doi/pdf/10.1162/EDFP_a_00047
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    More about this item

    Keywords

    debt limitations; referenda requirements; school district bond issues;

    JEL classification:

    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid

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