Voters facing $16.5 billion of new debt for state and local governments proved largely receptive in a lightly attended off-year election.
For the municipal bond industry, most attention turned to Texas, where voters approved statewide ballot issues for about $8 billion of bonds for water and student loans, but refused to grant counties bonding authority for redevelopment of blighted areas.
Texans also rejected a new bonding authority for El Paso County parks and a statewide tax incentive for water conservation on private land. For financially strapped schools, however, they did approve a measure that could result in more money from the state’s Permanent School Fund under a new formula.
The ballot issues were among 10 propositions designed as constitutional amendments requiring voter approval. With only 5.3% of voters turning out, seven of the 10 were approved.
Proposition 2 would replenish the Texas Water Development Board’s bond authorization with up to $6 billion of debt for projects throughout the state. It was approved by 52% of voters. Under the amendment, the TWDB can issue debt without voter approval as long as it does not exceed the $6 billion cap.
Approval of Proposition 3 by 55% of voters allows the Higher Education Coordinating Board to finance up to $1.86 billion of low-interest student loans with general obligation bonds. The board’s previously approved bonds are expected to be exhausted by 2014.
With 60% of voters rejecting Proposition 4, counties will not gain the authority that cities have to issue bonds for transportation redevelopment zones. Some opponents feared that counties could abuse the new power of eminent domain to condemn private property by declaring it blighted.
The constitutional amendment would have allowed counties to use tax-increment financing for transportation projects in areas declared blighted.
However, 58% of voters approved a related measure, Prop. 5, that allows cities and counties to make long-term interlocal agreements without having to renew it annually as they do under current law.
Proposition 6, a school funding measure, passed with 52% of the vote. The amendment changes the way funds are allocated to school districts from the Permanent School Fund that also backs bonds from school districts around the state. The amendment allows the General Land Office to distribute funds from the principal of the PSF for public education without first sending it to the fund’s board. A new formula for the PSF is expected to increase school funding known as the Available School Fund.
Under the Texas Constitution, El Paso County needed statewide voter approval to create a parks and recreation district that could issue bonds for its projects. But voters rejected Proposition 7, with 52% opposed.
And 57% of voters rejected Proposition 8, which would have allowed tax incentives for conservation and improvement of water quality on private land.
In local elections, Texas voters delivered mixed decisions on $1.75 billion of school bond issues. The largest bond package of $400 million won a narrow 52% approval in San Antonio’s North East Independent School District. Pasadena ISD voters also approved $270 million of school bonds, but several issues in smaller districts around the state failed.
Travis County voters approved $214.9 million of GOs for roads, bridges, parks and other uses. In the affluent Houston suburb of Montgomery County, 53% nixeed a $200 million bond issue for roads.
In Arkansas, voters strongly favored $575 million of Garvee bonds backed by federal highway revenue. The measure appeared to be winning more than 80% support, according to state officials.
State highway director Scott Bennett said he expects the first series of 12-year bonds to be issued in late 2012 with roadwork beginning in early 2013.
“I think today’s vote is evidence that the people are pleased with the way our Interstates have been improved in recent years,” Bennett said.
The largest bond measure in California, a $564 million authorization for San Mateo Community College District, failed according to preliminary returns, falling short of the required 55% supermajority.
San Francisco voters approved $531 million for schools and $248 million to improve roads, according to unofficial results. The school bonds under Proposition A won 70% of the vote, according preliminary results, clearing the 55% hurdle needed for approval. The Prop. B road bonds appeared to have 68% approval.
San Francisco voters easily approved union-supported Measure C, the milder of two pension-reform measures on the city ballot, while rejecting the more stringent Measure D pension reform.
In Washington, anti-tax advocate Tim Eyman’s statewide ballot measure to restrict tolls was narrowly behind in preliminary returns, with 49% in favor. Initiative 1125 would prohibit the state from diverting gas taxes and toll revenues to the general fund and limit the use of tolls to the transportation projects they pay for, such as the replacement for the State Route 520 floating bridge crossing Lake Washington.
In Arizona, 20 school districts were seeking approval of bonds or overrides on property taxes to raise more operating revenue. With results still coming in Wednesday, the bond proposals appeared to fare better than the overrides.
In the Paradise Valley Unified School District near Phoenix, a $203 million bond issue easily passed with 58% of the vote, while a proposed capital override remained undecided.
In the eastern suburb of Mesa, voters recalled powerful state Sen. Russell Pearce and elected another Republican in his place, business executive Jerry Lewis. Pearce led the fight for SB 1070 that made illegal immigration a state crime; the law’s harshest provisions have been on hold during a review by the federal courts.
In Virginia, voters approved $253 million of bonds for the Fairfax County Public Schools, while 58% in the Loudoun district approved $169.6 million.
In Kentucky, Democrat Steve Beshear was elected to his second term as governor with 55.65% of the vote. In Mississippi, Republican Lieut. Gov. Phil Bryant had 60% of votes in early returns to succeed Haley Barbour, who was term-limited out of office. Most of the election-night drama was reserved for the battleground state of Ohio and reliably red state of Mississippi, where highly charged political issues drew national attention.
Ohio voters soundly rejected legislatively mandated restrictions on the rights of collective bargaining by state employees. Ohio Issue 2 was defeated 63% to 37%.
Mississippi voters defeated a measure that would have granted a fertilized human egg the rights of personhood under the U.S. Constitution. Seen primarily as an anti-abortion measure, the proposal had previously failed in Colorado.