Southwest Faces $10B

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DALLAS - State and local governments in the Southwest are asking voters to approve more than $10 billion of bonds on a presidential election ballot expected to draw a record turnout a week from today.

Government officials throughout the region are wondering how turnout will affect their bond programs. In Arizona, one of the hottest ballot issues is voter turnout itself. Under Proposition 105 known as Majority Rules, any state bond issue or other ballot proposal that would require additional state spending would have to muster a majority of registered voters' approval, not just a majority of the votes cast.

Thus, a registered voter would be casting a "no" vote by not voting. For issues that have traditionally drawn a minority of voters to the polls, the new state constitutional amendment could be the kiss of death.

According to the Joint Legislative Budget Committee, five ballot initiatives approved by voters between 1998 and 2006 would not have met the proposition's so-called "double majority" standard and would not have become law.

"The way it works is that if somebody stays home and doesn't even take the effort to vote, their vote counts because they're effectively a 'no' vote," said Gov. Janet Napolitano, an opponent of the measure. "That's not fair. The vote should be the majority of those who take the trouble to vote."

In addition to the high turnout for the presidential and statewide issues, the weakening economy could also play a factor. The largest single bond proposal in the region, $747 million to rebuild Dallas County's historic Parkland Hospital, is fraught with economic issues, ranging from its mission to treat any patient, including undocumented workers, to its role as the teaching hospital for the prestigious University of Texas Southwestern Health Sciences Center.

"It's an outstanding institution," said Ray Hutchison, a partner at Vinson & Elkins who serves as bond counsel for the project. "Even I, as closely as I've been working with Parkland, did not realize the financial standards they had met."

Each of the eight states in the region has state or local bonds on its ballot, from $275 million in New Mexico to $4.4 billion in Texas, according to The Bond Buyer.

Arkansas voters will consider $304 million in bonds, with nearly all of it coming from a $300 million state debt measure to finance water and sewer projects. Arkansans voted down a similar bond program in 1996 before approving the current $300 million of bonds in 1998. If passed, the new program would extend the current one.

In Arizona, aside from Proposition 105, only local bond issues made the ballot after the secretary of state disqualified a proposed $42 billion package for roads because it lacked sufficient valid signatures. The loss of the program was a hard pill for Napolitano and other backers to swallow because it was seen as a potential boost to the state's economy, which has been hard hit by the housing collapse.

Bob Barrett, mayor of the Phoenix suburb of Peoria, has been reminding voters that "not all of the action is at the top of the ballot," despite the drama of native son Sen. John McCain's presidential contest with Sen. Barack Obama. Peoria's $378 million bond proposal would improve the city's infrastructure, parks and public safety with no increase in taxes, he said.

"Keeping the tax rate the same as it is now was critical to the bond issue," Barrett said.

Mesa, the largest Phoenix suburb, anchoring the East Valley, will ask voters for $169 million for roads and safety projects.

In Colorado, 25 of the 39 bond proposals are for schools. The districts are seeking a record $2.5 billion out of the more than $2.7 billion on ballots Nov. 4. The previous record was $1.1 billion, according to the Colorado Association of School Executives.

Denver schools are seeking $454 million, followed by suburban Douglas County with $395 million, Jefferson County with $350 million, Adams-Arapahoe schools with $215 million, Aurora schools with $205 million, and Cherry Creek with $204 million.

Colorado voters have a record of favoring school bond issues, according to the Colorado Association of School Executives. Bond questions in presidential election years have a 90% approval rate.

"That history probably was on the minds of at least some school boards as they prepared the bond proposals," according to the professional journal Education News. "What wasn't really on the radar was the economic crisis that's dominated the nation's attention in recent days. Financial uncertainty could cause some voters to think twice about higher taxes."

In addition to the bonds, 28 districts are asking voters to approve mill levy overrides amid rising operating costs.

Colorado pollster Floyd Ciruli reports that 52% of Colorado voters believe the state is in a recession, and only 48% think the state is moving in the right direction, down from 63% in last year's survey.

"After two years with immigration the top issue for the governor and Legislature to address, citizens say the economy is now number one," Ciruli said. "Immigration dropped to fifth position, and gas and oil issues appear for the first time - ranked in second place."

The Colorado ballot also includes several initiatives related to public finance, including Amendment 54 known as the Clean Government Initiative, designed to close a loophole in the law against "pay-to-play" contracting. The constitutional amendment would forbid holders or bidders of any contract worth $100,000 or more from making campaign contributions to officeholders involved in issuing the contracts within two years of bidding.

Other ballot initiatives include: Amendment 51 that would increase the sales tax in 2009 and 2010 to fund services for the developmentally disabled; Amendment 52, which would create the Colorado Transportation Trust Fund from excess severance tax revenues; and Amendment 58, which would increase the severance tax, eliminate a property tax deduction against the tax, retain an exemption for smaller oil and gas wells, and direct most of the new revenue to college scholarships.

Amendment 59 would create a state education fund savings account to be funded from 10% of the funds deposited into the state education fund, including revenue that would otherwise be rebated under the state's Taxpayer Bill of Rights rules, which the measure calls for diverting to the state education fund.

If Coloradans approve Referendum O future ballots could carry fewer proposed constitutional amendments. Referendum O would make it more difficult to place amendments on the ballot but would make it easier to call for a vote on state statutes.

In neighboring Kansas, all but $6 million of the state's $815 million in bond proposals are for the schools with Wichita's Sedgwick County Unified School District seeking the largest amount, $370 million.

New Mexico is asking for $224 million of state bond authority for senior citizen facility improvements, library acquisition, health facilities, and higher education improvements under four individual proposals. Bond question 4 is the largest, seeing $140 million for higher ed and special education enhancements. County bond requests make up the rest of the bond issues.

In Oklahoma, Tulsa's $258 million street bond proposal dominates the state's $367 million of bond requests. The city's bonds would go toward a $451 million program that would also tap other funds. Since school districts held their bond elections separately this month, only six cities and a county have local bond ballots.

Schools are well represented on Texas' 102 local bond proposals, with 46 districts seeking bond money. Debt-seeking districts in the Dallas-Fort Worth area include the Allen Independent School District north of Dallas with a $219 million proposal and Keller Independent School District north of Fort Worth seeking $168 million.

Among counties seeking bonds, Dallas County's $747 million request is the largest, but hurricane-devastated Galveston County's request for $135 million might provide an insight into how voters are able to respond to an election during a disaster recovery.

Lost in the flooding were voter registration cards along with an unknown amount of communication between the voter registrar's office and residents of the island. Due to delays in mail service, voter registration cards filed well before the Oct. 6 deadline are still arriving each day, according to the voter registrar's office.

Despite the problems, Galveston County reported a record turnout on the first day of early voting last week.

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