Voters to Decide Fate of $4 Billion in State Bond Issues
Infrastructure bond issues have roared back onto statewide ballots in this year's presidential election, with more than $4 billion dollars' worth tallied in nine states, up from $1.9 billion in five states two years ago, says the National Conference of State Legislatures, or NCSL.
In addition, there are finance measures on municipal or regional ballots, particularly large ones in Texas, and initiatives that could affect how industry firms do business in some states.
In Arkansas, voters will decide whether to approve a constitutional amendment to fund $1.3 billion—the largest proposal of any state—in state and municipal road upgrades through a 0.5% sales tax for 10 years. Funds would be used to expand or improve 190 miles of four-lane highways, says a state highway agency spokesman.
Mark Lamberth, president of Atlas Asphalt Inc., Batesville, and co-chairman of the Move Arkansas Forward group that pushed the sales tax increase, says its passage "would accelerate projects that are in place but have not been done." He says the measure would support 40,000 jobs statewide, but "there's not any question out-of-state people will come in." While polls in the state this summer showed support for the tax increase lagging, "we still feel very good about this," Lamberth says.
Even so, voter opposition kept another planned highway improvement tax measure off the ballot entirely. The Arkansas Trucking Association dropped its support last year of a 5¢-a-gallon diesel-fuel tax hike, which also had legislative approval, after polls and other research showed strong opposition.
In Rhode Island, voters will weigh several bond measures totaling more than $171 million for housing, higher education and clean water projects that could boost a struggling local industry. "We are hoping for passage by the people here," says David Iwuc, executive director of the Rhode Island Associated General Contractors' chapter.
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First Higher-Ed Issue in 25 Years
Supporters of a $750-million bond measure in New Jersey to expand higher-education construction are equally optimistic it will get voters' blessing, although an early September Rutgers University poll showed 55% had "heard nothing" about it.
The measure is the first for higher-ed capital upgrades since 1988 to make it onto state ballots.
Paul Shelly, a spokesman for the New Jersey Association of State Colleges and Universities, says the poll also showed 56% of voters would support the measure anyway. "That's not as strong as a couple of years ago, but we'll take it in this economy," he says. If enacted, schools must provide 25% of funds for academic projects, such as classrooms and labs, that are the only ones allowed to access bond measure funds.
A student coalition that aims to sign up thousands of new college-age voters statewide has publicly supported the measure.
Shelly notes that campus sports facilities and other revenue-producing projects may gain from a state law enacted in August that will allow public-private finance ventures for the first time. However, project developers must submit proposals to state officials by next August, he says.
School construction also could boom in Texas if finance measures on ballots in Houston, El Paso and other cities pass as expected. Most of Houston's $2.7 billion in finance measures would fund educational facilities. Texas is one of the least restrictive states for getting school finance measures on ballots, according to public finance groups.
But in a Sept. 26 report, the state's top finance official warned local governments that proliferating measures could overload taxpayers with debt. State Comptroller Susan Combs said municipal debt in Texas has risen since 2001 by 126%, to $27 billion.
The California cities of San Diego and Sacramento are seeking $2.8 billion and $346 million in school bond funding, respectively, while Mesa, Ariz., has a $230-million measure on the ballot.
But NCSL senior fellow Jennie Bowser says voters approved 73% of bond amounts proposed on 2008 ballots and 65% in 2010. "They almost always get approved," she says. "I think voters recognize that this is long-term borrowing—it's not usually accompanied with a big tax increase."
Initiatives Also May Affect Business
Industry firms and interest groups also are watching the outcome of key ballot initiatives. In Michigan, voters are weighing a measure to increase the state's renewable-energy standard to 25% by 2025. A Michigan State University study says it would double the number of so-called green jobs in the state.
Opponents say the measure would deprive Michigan's energy industry of flexibility to negotiate changing market conditions. Former state Senate Majority Leader Ken Sikkema (R), now a consultant, described it as "radical," saying Michigan would be the only state to mandate a renewable-energy standard.
Also on industry's radar is the outcome of another Michigan measure that would require a majority of voters to approve allocations of state funds for land acquisition, design, construction and other tasks related to "new international bridges or tunnels not … serving traffic as of January 1, 2012."
The initiative marks the latest move by billionaire Manuel "Marty" Maroun, owner of a toll bridge between Detroit and Windsor, Ontario, to halt a proposed second bridge between the cities.
But Gov. Rick Snyder (R) says the proposal won't interfere with the new span. "Agreements for the project already have been signed, and we're in the process of permitting," says a spokesman. He says the $3.5-billion project will create 10,000 construction jobs.
But due to "sloppy wording," other projects may suffer if the proposal passes, says the spokesman. Two state polls indicate voter support. "There's a lot of misinformation floating around out there," he adds.
Industry interests also are watching whether Maryland votes to expand gaming and whether Arizona renews a 2010 voter-approved 1¢ sales tax that would generate $100 million for transportation projects.
Industry interests have pumped in $350,000 to support the measure, but opponents, including Gov. Jan Brewer (R), say it would limit the Legislature's ability to balance the state budget.
In California, unions are fighting a proposition again on state ballots that would bar them from collecting funds from member paychecks for political purposes. Voters rejected the measure in 1998 and 2005 by small margins, says the Initiative & Referendum Institute, Los Angeles.
"The Election Day results on these and other bond questions will provide an important snapshot of the electorate's appetite for state financing of big transportation, educational, wastewater and other projects," says a spokesman for the American Subcontractors Association. "ASA is also watching other ballot measures—such as the New International Trade Crossing ballot question in Michigan—for signs as to whether the electorate feels projects delivered through alternative project financing, using private investments through public-private partnerships (P3s), will deliver the cost savings they promise."
| Major Election-Day Bond Measures on State or Local Ballots in ($) millions. Some amounts are maximum to be issued; amounts are rounded. | ||
|---|---|---|
| Location | Amount | Purpose |
| Houston* | $2,700 | Public schools, community colleges, municipal facility upgrades |
| Arkansas** | $1,300 | Transportation |
| Alabama | $750 | General obligation |
| New Jersey | $750 | Higher-education capital projects |
| Alaska | $454 | Transportation |
| Oklahoma | $300 | Water resources, wastewater treatment |
| New Mexico*** | $200 | Higher-education, libraries, facilities for seniors |
| Rhode Island*** | $171 | Veterans’ housing, higher-education, affordable housing, environmental management, water infrastructure |
| Maine | $76 | Transportation, higher education, drinking water, land conservation |
| SOURCES: NATIONAL CONFERENCE OF STATE LEGISLATURES; BALLOTWATCH/INITIATIVE & REFERENDUM INSTITUTE, UNIVERSITY OF SOUTHERN CALIFORNIA AND ENR RESEARCHNOTES: *OTHER STATE MUNICIPALITIES ALSO HAVE LOCAL BOND ISSUES ON their BALLOTs IN LESSER AMOUNTS. **PROPOSED 0.5% SALES TAX TO BACK TRANSPORTATION BONDS. ***MULTIPLE BOND ISSUES ON BALLOT. |
