The effect of North Carolina's Public School Building Bond Fund on county capital spending patterns, kindergarten enrollment, and local property tax growth
Abstract
North Carolina has a long history of offering state bonds meant to address the capital
needs of its public school system. The last major State effort taken to help counties
in funding capital needs took place in 1996 with the passage the of the Public School
Building Bond Act (H.B.1100), which created a $1.8 billion fund for all 100 North
Carolina counties. This paper uses the North Carolina Public School Building Bond
Fund as a test case to broaden the understanding of how outside capital funding may
affect capital budget decisions at the county level and whether increased kindergarten
enrollment or lower rates of property tax growth followed changes in spending. I find
that the bond fund significantly increased capital spending, both on average and statewide.
Counties that had low levels of spending prior to treatment tended to increase local
spending prior to bond usage in order to meet the matching requirements, increase
spending dramatically during treatment, and reduce spending after treatment, suggesting
that the bond was effective at addressing previously unmet needs for these counties.
However, counties that had high levels of spending prior to bond usage tended to reduce
local spending prior to bond usage and then raise it again after bond use, implying
some crowd-out of local spending. No relationship appears to exist between changes
in capital spending and increases in kindergarten enrollment. Further research can
determine whether this is due to missing data or concurrent changes in private or
charter schools. Counties that reduced local spending tended to reduce the rate of
tax growth as well, although counties with higher spending levels, total tax base,
and per student tax bases were able to afford much steeper reductions in the rate
of tax growth.
Type
Master's projectDepartment
The Sanford School of Public PolicySubject
capital budgeting, public school funding, state bonds, property taxes, kindergarten
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https://hdl.handle.net/10161/5160Citation
Holt, Blake; & Holt, Blake (2012). The effect of North Carolina's Public School Building Bond Fund on county capital
spending patterns, kindergarten enrollment, and local property tax growth. Master's project, Duke University. Retrieved from https://hdl.handle.net/10161/5160.More Info
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