Steps to a Successful Bond Referendum: A look back at GFR in June 1987.

• Position: Rewind - Government Finance Review

The June 1987 issue of Government Finance Review tackled bond sales. Readers were urged to do their homework on deposit collateral (this was a huge issue at the time; 150 banks and thrifts failed in 1986, and another 50 by June 1987), but the lead article was about selling bonds before the actual sale--"Elements of a Successful Bond Referendum."

"Casting a 'yes' vote for a bond referendum can be like accepting a blind date; the wisdom of the decision must await further developments," the author noted, adding that it doesn't have to be that way. "The pros and cons of a bond issue, contrary to those of a blind date, are developed well in advance of the decision date. Unfortunately, many jurisdictions do little to dispel the 'mystery' surrounding a bond referendum.

While uncertainty may enhance the allure of prospective romance, it is unlikely to enamor voters toward public infrastructure investment."

The article then explains that governments need to get information to voters explaining the purpose, timing, and tax impact of the bonds. "Thus, public officials, particularly those in the financial wing of a community, may be placed in the position of 'selling' the bond sale to voters in much the same way that candidates sell themselves to voters. If some effort is not made to present positive information to the voter before the vote, the natural inclination will be to vote 'no.'"

(Of course, some states don't allow a jurisdiction's officials and staff to promote or market local bond referenda. "In such cases, local officials often seek private participation in disseminating pro-passage information to the voters without using public funds and resources.")

The first objective of a bond referendum campaign is to present specific information that will allow the voter to make an informed choice. Both sides of...