True interest costs on district general obligation debt, built from a national panel of newly issued long-term unlimited GO bonds, 2011–2019.
25,654 bond issuances offering 266,212 serial bonds from Mergent and Ipreo (via the Municipal Securities Laboratory, GSU), matched to 11,831 regular school districts across 36 states, 2011–2019.
Using a Heckman two-step model to correct for selection into the bond-issuing sample, charter entry is associated with roughly 15 basis points higher true interest cost (TIC) on district general obligation bonds. That translates to about $15,700 a year in additional interest on an average-sized issue — around $314,000 over a 20-year term — suggesting the fiscal stress from contracting out can leave a long-lasting, hidden cost for traditional public school districts.