Strategies for Passing a Bond Referendum.

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;