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 December 31, 2003
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.