Publisher's Note: This post appears here courtesy of the John Locke Foundation. The author of this post is Brian Balfour.
There were 26 local bond referenda across the state in this fall's election, totaling $2.8 billion. The success rate? 100%
All 26 were approved easily, with the lowest approval rates in the mid-50s and several approval rates in the mid- to upper-70s. The stated purposes of the bonds were varied, but most dealt with either school construction and repair, affordable housing, road construction, or parks and recreation facilities.
The Town of Wake Forest had the most bonds on the ballot, with four, totaling about $76 million.
Wake County, unsurprisingly, tallied the highest dollar amount of bonds with $884 million: a $530 million bond for school construction and $353 million for Wake Tech Community College.
City of Raleigh residents approved another $275 million for parks and recreation facilities.
Wake County residents have seen their property taxes increased in 5 of the last 7 years, and they just voted themselves another one yesterday.
Conversely, there were five counties with local sales tax increases on the ballot. The success rate of those? Zero percent.
All five were defeated handily, by margins similar to the approval rates of the bonds.
The disconnect is somewhat striking. Voters strongly supported more local debt, but equally as strongly opposed tax increases. Granted, local bond debt is typically financed through property tax hikes, and it is local sales tax increases that were rejected.
However, the willing acceptance of increasing local debt while soundly rejecting local tax increases merits further examination.
For many years I've been positing that there is a lack of public finance knowledge among voters:
The fact that bonds are approved by voters so routinely while local tax increases continue to be defeated by wide margins provides more evidence to a theory of mine: many voters simply are not aware of what it means when they approve a bond. I believe many of them do not understand that they are authorizing an increase of their local government's debt. A debt that will have to be repaid - with interest - using their tax dollars.