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There were 398 bond referenda by Texas school districts from 1990-95. On average, these received a 58% voter approval rating and almost 75% of the referenda passed. A public choice model suggests many factors related to the voter percentage, including the amount of the bond issue per voter, percent of non-white population, and the amount of state and federal aid in the districts. Districts with Big Six auditors received higher voter percentages ceteris paribus, suggesting increased voter confidence in districts reviewed by brand name auditors. Districts with higher standardized test scores (TAAS) had more favorable votes, which can be interpreted that voters are willing to fund more infrastructure when output performance levels are adequate. A public choice model focusing on capital outlays was successful in explaining spending levels. A Big Six audit was associated with higher capital outlays, although TAAS was insignificant.

This study analyzes the effects of budget referenda on spending levels. An agency theory framework is used to identify the incentives of voters and school boards, and to discuss the use of the referendum as a budget control mechanism. The regression analysis compares expenditures in New York State school districts with and without referenda requirements. Total spending is found to be 5.5% higher in districts without referenda, ceteris parabis. However, the specific rules related to referenda and budget defeats appear to be important determinants of their effectiveness.