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Capital Financing of Schools: A Comparison of Lease Purchase Revenue Bonds and General Obligation Bonds
Author(s) -
Gamkhar Sahma,
Koerner Mona
Publication year - 2002
Publication title -
public budgeting and finance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.694
H-Index - 30
eISSN - 1540-5850
pISSN - 0275-1100
DOI - 10.1111/1540-5850.00071
Subject(s) - revenue bond , bond , obligation , lease , debt , finance , municipal bond , revenue , business , state (computer science) , economics , law , political science , algorithm , computer science
School building construction is on the rise nationwide and Texas has led the nation in outlays on school construction. We consider key factors that distinguish lease purchase revenue (LPR) bonds and general obligation (GO) bonds as debt instruments for financing school facilities in Texas. Our research shows that LPR bonds typically have a higher interest cost than GO bonds and they do not have any advantages over GO bonds in circumventing state restrictions on school district tax and debt authority. Voter approval requirements implicit in the state aid formulae supporting school bond repayments and the bond election requirements are however both less stringent in the case of LPR bonds than GO bonds.