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

Mary H. Harris () and Vincent G. Munley ()
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Mary H. Harris: Department of Business, Cabrini College
Vincent G. Munley: Department of Economics, Lehigh University

Education Finance and Policy, 2011, vol. 6, issue 4, 537-556

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

Keywords: debt limitations; referenda requirements; school district bond issues (search for similar items in EconPapers)
JEL-codes: I22 (search for similar items in EconPapers)
Date: 2011
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