Yinger paper on New York's Building Aid program published in National Tax Journal

Aug 31, 2011

School District Responses To Matching Aid Programs For Capital Facilities: A Case Study of New York’s Building Aid Program

Wen Wang, William D. Duncombe & John M. Yinger

National Tax Journal, August 2011

John M. Yinger

Economics Department

Public Administration & International Affairs Department

Center for Policy Research

Education

National Tax Journal

John M. Yinger

States are financing a larger share of capital investment by school districts but little is known about how districts respond to facility aid programs. This paper addresses this gap in the literature by examining how a short-term increase in the matching rate for the Building Aid program in New York affected district capital investment decisions.

The authors estimate a capital investment model and find that most districts are responsive to price incentives but that price responsiveness is related to the fiscal health and urban location of the district. Drawing on these results, the authors provide recommendations for the design of capital investment aid programs to increase their effectiveness in supporting high-need urban districts.