Fiscal effects of local option sales taxes on school facilities funding: The case of North Carolina

Since the 1970s, the North Carolina Legislature has authorized its counties to levy four local option sales taxes (LOST). Proceeds from two of them are partially restricted for school capital needs; two other LOST are used to augment counties' general revenues that may also affect school capita...

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Bibliographic Details
Published inJournal of public budgeting, accounting & financial management Vol. 23; no. 4; pp. 507 - 533
Main Authors Wang, Wen, Zhao, Zhirong (Jerry)
Format Journal Article
LanguageEnglish
Published Boca Raton Emerald Publishing Limited 2011
Emerald Group Publishing Limited
Subjects
Construction
Debt financing
Debt service
Education
Enrollments
Expenditures
Federal funding
Fiscal years
Funding
Impact analysis
Inequality
Legislatures
Property taxes
Public schools
Retirement of debt
Revenue sharing
Sales taxes
School buildings
School districts
School finance
Studies
Tax revenues
North Carolina
United States > US
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Summary:Since the 1970s, the North Carolina Legislature has authorized its counties to levy four local option sales taxes (LOST). Proceeds from two of them are partially restricted for school capital needs; two other LOST are used to augment counties' general revenues that may also affect school capital funding. Experiences from other states have raised concerns that the adoption of LOST may increase inequality in school finance, but the empirical results have been mixed. Using a data set of one hundred North Carolina county school districts from 2004 to 2006, this study examines how public school facilities are funded, and investigates whether the adoption of LOST aggravates or alleviates inequality in public school capital revenues in the state.
ISSN:1096-3367
1945-1814
DOI:10.1108/JPBAFM-23-04-2011-B003