DALLAS — Coloradans will decide today whether the state has issued its last bonds, as voters throughout the nation deliver their verdict on debt and taxes.
With an anti-government theme dominating Tea Party campaigns, voters will choose a Congress that could curtail federal spending in favor of new austerity measures.
Republicans are likely to win 231 seats in the House and take control of it, according to the Reuters/Ipsos poll on Monday. Ipsos pollster Cliff Young predicted Democrats would retain the Senate with either a margin of 52 to 48 or 53 to 47.
Republican gains in Congress presumably could mean sharp reductions in funds for the states and that could reduce bond issuance, particularly in transportation. Also at risk is the future of Build America Bonds, part of President Obama’s stimulus program that has angered Republicans. Issuers have two months left to sell BABs at the 35% federal interest subsidy before the program is set to expire on Dec. 31. A lame-duck session of Congress could extend the BABs before Republicans take over the House, however.
In Nevada, Tea Party candidate Sharron Angle, running on the Republican ticket, led Senate Majority Leader Harry Reid in the latest polling.
Even with Reid’s defeat, the Democratic Party is expected to maintain a slim majority in the Senate, according to most polls.
The rise of the Tea Party in Colorado has raised fears in the bond community that voters might approve three ballot initiatives known as Amendments 60 and 61 and Proposition 101. Amendment 61 would ban all borrowing by the state, and Amendment 60 would reduce property tax levies for schools. Proposition 101 would reduce the state income tax and eliminate or reduce vehicle fees and taxes, and eliminate or reduce state and local telecommunication fees and taxes.
Chances of the three measures passing are considered remote, according to recent polling.
Coloradans will also join voters in Arizona and Oklahoma in deciding if a key provision of Obama’s health care initiative — requiring everyone to either buy insurance or face a penalty, starting in 2014 — should be imposed upon them. Republican leaders believe they could quash the mandate through the initiative. Voters in Missouri have already approved the prohibition of the mandate.
Among the 160 ballot initiatives in 37 states is a proposal to reduce Massachusetts’ sales tax to 3% from 6.25%, forcing the state to cut $2.5 billion in services.
In Arizona, one of the states hardest hit by the recession, voters will decide whether to shift $345 million from a voter-approved account for children’s development and health into the state’s general fund. Proposition 302 would eliminate the Arizona Early Childhood Development and Health Board, also called First Things First.
Proponents of Prop. 302 say the state needs the money to help close a deficit of $1.4 billion. Opponents say the programs First Things First supports provide valuable services that would be lost if the proposition passes.
In Washington State, voters may repeal new taxes on candy, soda, and bottled water adopted by the Legislature last year. Passage would eliminate a projected $352 million in revenue over five years. A related measure would reimpose a requirement for a two-thirds majority in the Legislature to raise taxes.
Arkansas voters will decide on a constitutional amendment to repeal interest-rate limits on government bonds. The constitution limits the interest rate on governmental bonds supported by tax revenues to no more than 500 basis points above the discount rate of the Federal Reserve Bank of St. Louis.
Approval of Issue No. 2 would enable local governments to finance energy improvements at public facilities with bonds supported by the savings in utility costs.
Issue No. 3 would allow the state to issue general obligation bonds to attract economic development. The proposed amendment would replace the current limits with unspecified requirements to be determined by the General Assembly.
The current threshold allows bonds to be issued only for projects that provide at least $500 million in private investment and create at least 500 jobs.
Oklahoma’s 11 state questions on the ballot is the largest number in state history.
State Question 744 would amend the constitution to require funding to local schools to meet the average of the surrounding states. A competing question would prohibit the requirement.
State Question 757 would increase the level of year-end surpluses that are set aside in the budget stabilization fund to 15% from the current 10%.
In Texas, 37 school districts are asking voters to approve bond proposals today.
The San Antonio Independent School District, which has seen enrollment dip by 2.6% since fiscal 2004, wants to close five older schools and move those students into facilities renovated with bond proceeds.
The Katy Independent School District near Houston is asking for approval of a $460 million general obligation package.
Other districts seeking bond authorizations include the Lubbock Independent School District, which asked for $198 million of bonds without a tax increase, a $198.8 million proposal from the Judson Independent School District in northeast Bexar County, and the Georgetown Independent School District’s request for $137.3 million of bonds.