Examining Federal Impact Aid's Reimbursement for Local School Districts

Published in: Contemporary Economic Policy, v. 22, no. 4, Oct. 2004, p. 534-543

Posted on RAND.org on January 01, 2004

by Richard Buddin, Brian Gill, Ron Zimmer

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In 1950, Congress created the Federal Impact Aid Program to compensate local school districts for lost tax revenue or increased burdens resulting from federal activities, including the placement of military bases within school districts. Currently, Impact Aid provides nearly $1 billion per year in subsidies to approximately 1400 local school districts that enroll over 1.2 million eligible children. This current study examines the adequacy of the funding in the Impact Aid program as an example of how the existing public finance literature provides the tools to help policy makers make informed decisions.

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