WASHINGTON — Six of the 2014 state of the state speeches delivered before this week included bonds as a theme, according to a report from Loop Capital Markets.
Of the 39 governors whose speeches Loop had analyzed in its report released Monday, 15% of them — in Hawaii, Massachusetts, Missouri, New York, Oklahoma and Rhode Island — discussed bond proposals, the report said. This represented a decline from 2013, when 18% of the speeches included bonds as a theme, but is up from 2012, when only12% of the speeches mentioned bonds.
The governors want to issue bonds for different reasons.
Hawaii Gov. Neil Abercrombie, a Democrat, proposed using general obligation bonds to obtain a conservation easement of more than 600 acres at Turtle Bay, which is located at the North Shore of Oahu. Massachusetts Gov. Deval Patrick, a Democrat, recommended that the slate legislature pass bond bills related to infrastructure improvements, Loop said.
Missouri Gov. Jay Nixon, a Democrat, proposed issuing bonds to help finance the construction of a new mental hospital. New York Gov. Andrew Cuomo, a Democrat, proposed a $2 billion bond referendum for technology upgrades for schools and student learning devices, the report said.
Oklahoma Gov. Mary Fallin, a Republican, proposed issuing bonds to repair the state capitol building. She also said she supported a resolution that would allow every school district to pursue a one-time increase in bonding capacity to fund upgrades such as storm shelters, safe rooms and protections against intruders.
Rhode Island Gov. Lincoln Chafee, a Democrat, recommended referendums for bonds whose proceeds would be used to finance renovations and construction at the University of Rhode Island's engineering school, enhancements and renovations to mass transit hub systems, improvements to Department of Environmental Management programs, and support for the arts, Loop said.
The most common themes of governors in their state of the state addresses this year have been education reform, job creation and training, lowering taxes or keeping them flat this year, and infrastructure investment. These have also been among the most common themes in previous years' speeches, Loop said.
Although most states are experiencing budget surpluses, governors proposed only modest increases in general fund expenditures. Most increases in spending were directed toward education and infrastructure. But while 21 governors proposed investing in infrastructure, only six mentioned the actual dollar costs of projects, Loop said.
Many governors proposed tax reductions and tax credits for businesses. However, unlike last year, few governors in 2014 proposed broadening alternate taxes or reducing other credits to fund income, corporate and business tax reductions.
"In states where year-end surpluses are not expected or expected to be relatively modest and the governor is running for reelection, it is questionable how feasible these governors' tax reform proposals are, or if they are just part of a campaign strategy with low probability of actual implementation," Loop said.
Of the 12 themes that Loop tracks, the only ones that were significantly less prevalent this year were health care reform and state unemployment insurance reform. "Few governors discussed lowering health care costs which we attribute to the upcoming gubernatorial election given the longstanding battle between political parties on the subject," Loop said.
The number of governors proposing unemployment insurance and pension reform has been declining because many states have enacted reforms, the report said.
The governors of Florida, Louisiana, Minnesota, Ohio and Oregon had not yet given their addresses at the time of Loop's analysis. In addition, the governors of six states — Arkansas, Montana, Nevada, North Carolina, North Dakota and Texas — will not be giving state of the state speeches this year.
