'Robin Hood' and Texas School District Borrowing Costs

22 Pages Posted: 15 Jun 2005

See all articles by Earl D. Benson

Earl D. Benson

Western Washington University - Finance and Marketing Department

Barry R. Marks

University of Houston, Clear Lake - School of Business and Public Administration

Abstract

The 'Robin Hood' system of school financing in Texas takes property tax funds from wealthy school districts and gives them to poorer districts. This paper examines Permanent School Fund-insured, school district debt and discovers that under the 'Robin Hood' system, Texas school districts with either Aa or A1 underlying credit ratings have higher borrowing costs than districts with lower ratings. Also, the borrowing costs of Texas school districts with underlying credit ratings of Aa and A1 are higher than those for non-Texas, privately insured school districts with the same ratings, while the borrowing costs of A and Baa-rated Texas school districts are lower.

Suggested Citation

Benson, Earl D. and Marks, Barry R., 'Robin Hood' and Texas School District Borrowing Costs. Public Budgeting & Finance Vol. 25, No. 2, pp. 84-105, June 2005. Available at SSRN: https://ssrn.com/abstract=739396

Earl D. Benson (Contact Author)

Western Washington University - Finance and Marketing Department ( email )

FMDS Department MS 9077
Bellingham, WA 98225-9077
United States
360-650-3375 (Phone)
360-650-4844 (Fax)

Barry R. Marks

University of Houston, Clear Lake - School of Business and Public Administration ( email )

Houston, TX 77058
United States

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