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

Source: Mary H. Harris, Vincent G. Munley, Education Finance and Policy, Vol. 6, No. 4, Fall 2011
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From the 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.

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