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Arkansas Water Bond, Referred Question 1 (2008)

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Question No. 1, also known as the Arkansas Water Bond Act, appeared as a legislatively-referred bond issue for the issuance of $300 million for the financing and refinancing of water, sewer, and pollution projects on the November 4, 2008 ballot in Arkansas, where it was approved.[1]

Election results

Arkansas Water Bond
ResultVotesPercentage
Approveda Yes 631,767 65.5%
No332,50734.5%

Text of measure

The official ballot question reads:

Shall the Arkansas Natural Resources Commission be authorized to issue General Obligation bonds under the authority of the Arkansas Water, Waste Disposal and Pollution Abatement Facilities Financing Act of 2007, for the financing and refinancing of the development of water, waste disposal, water pollution control, abatement and prevention, drainage, irrigation, flood control, and wetlands and aquatic resources projects to serve the citizens of the State of Arkansas, in total principal amount not to exceed Three Hundred Million Dollars ($300,000,000), with no more than One Hundred Million Dollars ($100,000,000) of such bonds to be issued to finance and refinance the development of irrigation facilities, in series from time to time in principal amounts not to exceed, without prior approval of the General Assembly, Sixty Million Dollars ($60,000,000) in any fiscal biennium, which bonds shall be secured by a pledge of the full faith and credit of the State of Arkansas?

Background

Arkansans voted down a similar bond program in 1996 before approving the current $300 million bond program in 1998. This 2008 proposal, if passed, would extend the current program. Many voters in 1996 believed the bond program was nothing more than a tax. In 1998, the Arkansas Municipal League opposed the measure, questioning whether it would hurt the welfare of existing cities and lead to urban sprawl, but the AML did not actively campaign against the measure. Municipal League Director Don Zimmerman said many of the questions remain, such as whether small cities would have to rebuild existing water lines if they don't meet new fire codes, if new lines are added. Zimmerman said he sent a letter to Thyer's committee seeking answers to some of those questions, and that he is willing to meet with committee representatives.

Specific Provisions

The proposal enacts the following provisions:

  • Cap financing for irrigation projects at $100 million;
  • Limit to $60 million the total principal amount to be issued during any two-year budget cycle, unless the Legislature authorizes more;
  • The Arkansas Natural Resources Commission would issue low-interest, tax-free bonds for water, wastewater, sewer, drainage, irrigation, flood control, and wetlands projects;
  • Approve applications on a case-by-case basis;
  • Require that ratepayers who use the systems would pay back the bonds.
  • Stipulate that bond money also could be used to match federal grant money for water and sewer projects, according to Randy Young, executive director of the Arkansas Natural Resources Commission.
  • Extend the current program, approved by voters in 1998.

Taxpayer perspective

Referred Question No. 1 would authorize $300 million in bonds for water, sewer, and pollution projects. Bond borrowing can cost taxpayers twice the original loan amount to pay back.

Supporters

Arguments in Favor

Notable arguments made in favor of the measure included:

  • If the Arkansas Natural Resources Commission runs out of bonding authority, cities and municipalities will have to turn to local banks to get credit for water and sewer projects.
  • Referred Question 1 is not a tax, and needs to be re-authorized every 10 years.
  • Interest to local banks would be significantly higher than bonds backed by the state.

Funding

Thyer's 30-member committee hopes to raise $250,000 for the effort.

Opponents

The Arkansas Wildlife Federation opposes Arkansas Referred Question No. 1.

Arguments in Opposition

Notable arguments in opposition included:

  • As noted above, the American Taxpayer's Union has raised concerns that taxpayers may find themselves bearing the costs of unpaid bond issues.
  • Arkansas Wildlife Federation President David Carruth says many members of his group are farmers, hunters, and landowners who fear their property rights would be endangered if the measure passes.
  • The Federation claims the measure would give broad powers to the Arkansas Natural Resources Commission to take title to or determine the use of private recreational lakes, stock ponds, irrigation reservoirs, and certain rivers.

Status

This measure was referred from the state legislature to appear on the November 2008 ballot.

See also

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References