This November is not only when we’ll go to the polls to elect a new president and new national, state, and local officials. It’s also when we’ll get an opportunity to vote on what infrastructure will be built in our communities over the coming years – like new schools, bridges, and sewage plants.
How? When a public agency (like a school district or a parks and recreation department) is planning a large infrastructure project and needs to borrow money to pay for it, it is typically required by state law to get voter approval, by posting a bond measure on the ballot. Want a refresher on how bonds are made? Check out our lifecycle of a bond video.
Because public agencies need voter approval to go ahead with their plans, they are just as keen as any presidential candidate to get out the vote. That’s why public agencies often time their bond measures with presidential election years – because more people typically vote in presidential election years than in other elections. In fact some types of bond measures (see California’s Prop 39 below) can only be proposed in election cycles that include national elections, to boost participation.
That means this November is a big moment for public agencies that want to fund new infrastructure projects. In the last presidential election cycle in 2012, California school districts alone proposed 106 school bond measures, ranging from $830,000 to $2.8 billion, compared with 10 proposals last year. 80% of the 2012 measures were approved, compared to 90% last year.
Here’s a quick guide to how bond elections work and what to look out for in the months leading up to November.
How are bond measures made? The case of California school districts
Every state has its own rules around bond measures and the majorities required to pass the measure so look out for guidance in the information supplied by your local elections department.
We’ll focus on California school district issuers here, since they are historically the issuers of the most bonds that require elections – and therefore most likely to end up on your ballot.
Here’s how it works.
As our lifecycle of a bond post explains, a school will typically already have a Capital Improvement Plan (CIP) or something similar outlining the infrastructure work it needs completed.
From the CIP, it takes 4 steps to transform these ideas into bond measures.
Step 1: The district’s financing team conducts political research on how popular the bond measure is likely to be. If there isn’t sufficient community support, the district may delay or cancel the project.
Step 2: Since school districts are funded by property taxes, the financing team calculates how much they will need to raise taxes in order to finance the project. Tax increases may be capped by legislation (see Prop 39 below).
Step 3: The district decides what type of measure it would like to propose. California school districts have 2 options: Proposition 39 measures and Proposition 46 measures.
A Prop 39 measure needs 55% of the vote to pass and can only be proposed in years in which there are state-wide or district-wide elections. Prop 39 measures authorize property tax rate increases that are capped depending on the type of district. This cap is intended to protect voters from high tax rates. A Unified School District can increase property taxes by up to $60 per $1,000 of Assessed Value, a Union School District is limited to $30 per $1,000, and a Community College District can increase taxes up to $25 per $1,000. In the second part of this article, we’ll explain how to calculate what that might mean for your tax bill.
A Prop 46 measure needs 67% of the vote to pass, but there are no caps on how much property taxes can be increased.
Step 4: The school board votes on the proposed measure and if the measure is approved, it is added to the ballot and the campaign phase begins.
Let the bond measure campaigning commence!
In the run up to November, you’ll likely receive printed marketing material for and against bond measures. The campaigning that happens around a measure is private activity independent of public agencies. Just like other elections, candidates and their supporters can’t spend tax dollars on campaigns.
As soon as a bond measure is approved to be on the ballot, groups of community members gather to form bond campaign groups. These groups raise money, produce campaign materials, and submit their arguments to the elections committee, which publishes summaries of the measures along with sponsored opinions.