Capital Financing of Schools: A Comparison of Lease Purchase Revenue Bonds and General Obligation Bonds.

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This article uses Texas as an example of the distinction between lease purchase revenue (LPR) bonds and general obligation (GO) bonds. The study shows that LPR bonds typically have a higher interest cost than GO bonds and do not have 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, however, are less stringent for LPR than GO bonds, and thus tend to be used by schools in property-poor districts.
Gamkhar, Shama; Koerner, Mona
Public Budgeting and Finance
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