This article reviews the theory of individual preferences between tax and
bond finance
of municipal expenditures and tests the hypotheres that cities'
borrowing will vary in relation to the cities' capital expenditures, median
income, bond rating, and the population level, growth, mobility, and age
composition. Differences in bond ratings, population, and population growth
did not prove significant, but median income, capital expenditures, and
population mobility were found to have statistically significant effects on the
percentage of city expenditures financed by borrowing.
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