Ballot Box Capital Spending Exceeds $1.3 Billion

By. Neil Williamson, President

In case you did not notice, earlier this week there was an election.

In addition to the Presidential race, several localities had so called “Bond Issues” on their ballots.  Albemarle County was one of 17 bond issues presented by 6 localities this year – This represents over $1.3 Billion in capital spending – not surprisingly all passed by fairly significant margins.    bond-chart-2016

The Free Enterprise Forum does not question the need for any of these projects but we do wonder if the ballot box is the proper place for determining their priority in the community.

Voters are provided a binary choice of support or not support a distinct number of capital projects in a particular government function but they are not told (on the ballot) the impact on their local budget or the other capital improvement items that might have to be postponed in order to pay for the proposed bond referendum.

Interestingly, this year when voters in four localities were provided the option to institute a meal tax – it failed in three of the four localities (Passed Matthews County 54%).  The lesson, regardless of the actual impact, if you do not call something a tax the citizens will be likely endorse it.

The Free Enterprise Forum is very concerned that referendums [and fees (i.e. storm water)] are providing local government a new way to generate revenue and duck responsibility for making the hard choices that result in tax increases.

In addition, it seems that the manner the ballot question is phrased also has an impact on the success of the effort.

Tuesday, Augusta County residents were asked not about a bond issue but a straight spending question.

Shall the Courthouse of Augusta County be removed to the Augusta County Government Center Complex in Verona, Virginia, and shall the Board of Supervisors be permitted to spend $45,000,000.00 therefore?

Voters (66%) said no.

But Henrico Schools Bond referendum asked a 6 times larger spending question in a completely different way:

Shall Henrico County, Virginia, be authorized to contract a debt and issue its general obligation bonds in the maximum aggregate principal amount of $272,600,000 pursuant to the Public Finance Act of 1991 to finance school projects and the Henrico County School Board’s Capital Improvement Program, including capital improvements to schools, furnishing and equipping of schools, acquisition of future school sites, and such other school construction, renovations, and improvements as may be required by the actual education needs in Henrico County?

It seems to this observer that voters strongly favor financing options for municipal spending even absent tax ramification information but push back on the concept of making specific spending decisions.  The language of the ballot question matters.

More importantly perhaps is not how voters are asked but should they be?

The self governance part of our philosophy appreciates the apparent citizen involvement in the process but the cynical portion questions if by limiting the choice to a binary yes/no decision they are truly engaged.

Shouldn’t those we elect make the tough choices between adding classroom space or adding a firehouse?  Aren’t they in the best position to evaluate competing priorities?

The reality is each and every one of the bond referendums that passed will be repaid using local tax revenue but not one of them said in the ballot question how the amount borrowed equates to the property tax rate increases during the term of the bond.  .

Considering the significant disclosures required when we as private citizens take on debt (car, auto, etc.) is it too much to ask for a truth in lending statement for over $1.3 BILLION in capital spending?

The Free Enterprise Forum believes such fiscal clarity should be an integral part of such ballot questions.  Unfortunately, we doubt such change will be made any time soon as that might negatively impact the passage rate and require elected officials to make the tough capital budget decisions.

Respectfully Submitted,

Neil Williamson, President


Neil Williamson is president of the Free Enterprise Forum, a privately funded non-profit public policy organization focused on local governments in Central Virginia. For more information visit www.freeenterpriseforum.org.

 

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