DALLAS — An Arkansas district judge gave the state the go-ahead Tuesday to tabulate the votes on a measure lifting the constitutional ceiling on public debt interest rates.
In her ruling issued almost five hours after voting began, Judge Mary McGowan of Pulaski County Circuit Court rejected arguments that Issue 2 was improperly developed by the General Assembly and incorrectly titled on the statewide ballot.
The constitutional amendment would remove the current rate limitation on bonds issued by or loans to state and local governments in Arkansas. The debt cannot have an interest rate higher than 200 basis points above the 90-day commercial paper discount rate posted by the Federal Reserve Bank of St. Louis, which is currently 0.75%.
Another provision would allow local governments to issue revenue bonds for energy-efficiency projects supported by the cost savings achieved.
McGowan turned down the request for an injunction to prevent Secretary of State Charlie Daniels from “canvassing, counting, or certifying any votes” on Issue 2 after a 45-minute hearing on Monday. The written opinion was issued four minutes before noon on Tuesday.
“The judge agreed with us on all the points argued,” said Little Rock attorney Elizabeth Robben Murray, who represented supporters of Issue 2.
Christopher Brockett, a partner in Hatfield & Sayre of Little Rock, which filed the suit, said the plaintiff will not seek an immediate injunction with an appeal to the Arkansas Supreme Court. “We will review the options with our client and determine in the next few days whether this matter will be appealed,” he said.
If voters reject the measure, Brockett said, there would be no need to appeal McGowan’s ruling.
The suit was filed Sept. 24 by Eugene Sayre of Hatfield & Sayre on behalf of a Jacksonville resident. In the original filing, Sayre asked that Issue 2 be removed from the printed ballot.
The Supreme Court sent the case to district court on Oct. 22, ruling that it lacked original jurisdiction and could not consider the request until it had been appealed from a lower court.
At Monday’s hearing, Sayre said the title of Issue 2 on the ballot was “manifest fraud being committed on the public” because it did not state that the amendment would remove restrictions on interest rates. He also maintained that Issue 2 covered several unrelated topics that proponents knitted together under the umbrella of “economic development.”
“Under their theory, you could bring as many issues as you could think of as long as you could tie them with the one thread of economic development,” Sayre said during oral arguments.
In her response, Murray said the proposed amendment had the single purpose of removing debt limits that restricted economic growth.
If the amendment is approved, it would go into effect in 60 days. Issue 2 would repeal Article 19, Section 13 of the Arkansas constitution as well as amendments 30, 38, 62, 65, and 78.