Strategies for Passing a Bond Referendum.

• Author: Kelly, Margaret C. H.

This article highlights successful approaches for passing bond referenda in state and local communities. Two case studies of successful initiatives are provided as examples.

When a state, county, or community identifies the need for additional capital, it has several options ranging from increasing sales or other taxes, to special fees for services, to bonding. A jurisdiction often chooses to issue bonds to avoid raising taxes and fees and/or to meet the specific capital needs of the project. While different states have varying restrictions on the abilities of state and local governments to levy taxes or impose fees, all jurisdictions may issue debt.

But issuing debt is not always the easiest option. In most states, bonds backed by general taxes (general obligation bonds) must be approved by the voters. Trying to convince the voters of the need for a $20 million library or park can be a difficult task. In some communities, anti-tax groups who oppose government spending may organize to oppose the bond measure, and the government is left scrambling to rally support.

Finance officers and elected officials [1] typically do not have the background to organize and then support a bond referendum. But in spite of that, they will need to take on the role of marketing executive/campaign manager/community cheerleader in order to get a bond referendum passed. This article highlights six steps necessary to pass a bond measure and provides case studies of two communities who successfully passed bond measures.

Winning a Bond Measure

Putting a bond referendum before the voters is only the tip of the iceberg. Most of the work already has been done by election day. From structuring a bond package that meets the needs of a community to implementation of the project funded by the bond, there are six steps that facilitate a sound public finance approach:

1) capacity building;

2) feasibility research;

3) polling;

4) measure design;

5) campaigning; and

6) implementation.

The purpose of capacity building is to build a broad base of community-based leadership to assist with the development of the proposed public finance measure. At this stage, it is important to identify local leadership and facilitate communication among interested parties.

During the feasibility research phase, relevant information is gathered to inform the development of public opinion polling and measure design. At this juncture, it is necessary to consider fiscal issues (current funding, bond ratings, revenue trends, and debt burden), political circumstances (local political trends and other pending ballot questions), key community issues and priorities, and results of past elections.

During the next step, polling, the goal is to identify voter priorities. This includes quantifying the amount that voters are willing to pay for these priorities, as well as narrowing down compelling arguments for the project and testing actual ballot language.

Measure design involves developing ballot language that appeals to voters and clearly explains how this measure addresses the particular issue targeted by the bond and meets the needs of the community. At this stage, it is also important to review the proposed measure with the appropriate government and bond counsel.

The focus of the campaign is straightforward: publicize the proposed ballot measure and encourage voter turnout. Campaign steps include disseminating direct mail pieces, promoting the cause via other means (e.g., Web sites), and orchestrating media coverage.

The last step, implementation, assumes a successful campaign. Now that the voters have approved the measure, it is important to ensure a smooth transition to the next appropriate project phase. Each set of local circumstances requires that this six step continuum be a flexible tool and a work in progress. The two case studies discussed below highlight different circumstances and goals, as well as different approaches.

Case Studies: Two Referendums

This section consists of case studies detailing two successful bond referendum campaigns that the Trust for Public Land assisted...