Oregon Property Projects, Measure 72 (2010)

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The Oregon Property Projects, Measure 72 appeared on the November 2, 2010 statewide ballot in Oregon as a legislatively-referred constitutional amendment where it was approved.[1]

The measure proposed authorizing lowest-cost borrowing for the state's real and personal property projects.[2][3]

Aftermath

On April 28, 2011 Gov. John Kitzhaber signed Senate Bill 19, which would put into motion the reforms approved by voters in 2010 (Measure 72). According to reports, the new bill is expected to save the state tens of millions. In addition to SB19, the state is scheduled to sell $1 billion in new bonds during the 2009-11 biennium.[4]

The full bill can be read here.

Election results

See also: 2010 ballot measure election results
Measure 72 (Property Projects)
ResultVotesPercentage
Approveda Yes 774,352 58.65%
No546,01641.35%

Source: Oregon Secretary of State.

Text of measure

Title

Amends Constitution: Authorizes exception to $50,000 state borrowing limit for state’s real and personal property projects.[5]

Result of “yes” vote: “Yes” vote authorizes exception to $50,000 state borrowing limit for state to issue lowest-cost bonds to finance state real and personal property projects. Prohibits property tax for repayment. Limits amount borrowed.

Result of “no” vote: “No” vote retains state borrowing limit prohibiting state from issuing lowest-cost general obligation bonds except for certain purposes.

Summary

According to the Secretary of State, the summary read as follows:[5]

Currently, the state constitution forbids lending the state’s credit or borrowing in excess of $50,000, with some exceptions. The measure would amend the state constitution to add a new exception to allow the state to issue general obligation bonds to finance acquisition, construction, remodeling, repair, equipping or furnishing of state owned or operated property. General obligation bonds are the cheapest method of borrowing the state may use and would cost less than the certificates of participation the state currently uses. The bonds would save an estimated $5 million on interest costs for each $100 million issued. The measure does not authorize any specific bonds, but authorizes the Legislative Assembly to enact implementing legislation. The measure prohibits the levy of property taxes to repay the bonds and limits the amount of outstanding bonds to one percent of the real market value of property in the state.

Financial impact

The financial impact, according to the Secretary of State's office:[5]

Measure 72 has no direct financial effect on state or local government expenditures or revenues. General obligation indebtedness authorized by this measure typically provides the lowest-cost method of financing. If the State of Oregon uses this authority to issue general obligation indebtedness or refinance current debt, the state should experience lower financing costs.

The explanation of the financial impact statement reads as follows:[5]

This measure allows the Legislature to use lower-cost general obligation bonds for future building projects and to refinance current state debt to avoid future interest costs or realize interest savings through lower interest rates. Any savings would be redirected at the discretion of the Legislature. Had this measure been in place during 2009, the state would have realized interest savings of about $38 million over the life of bonds issued that year.

Media editorial positions

Main article: Endorsements of Oregon ballot measures, 2010

Support

  • The Mail Tribune supported the proposed measure. In an editorial, the board wrote, "Measure 72 sounds alarming at first glance; it "authorizes exception to $50,000 state borrowing limit for state's real and personal property projects." But it doesn't actually open the doors to more borrowing. In fact, it authorizes no specific borrowing at all...The measure would save the state $5 million in interest for every $100 million borrowed...If the measure had been in place last year, the state would have saved $38 million in interest over the life of bonds issued that year."[6]
  • The Register-Guard supported Measure 72: "The measure would not alter existing debt limitations or approve new projects, but would result in savings through lower interest charges."[7]
  • The Daily Astorian supported Measure 72. "Our recommendation is to vote yes. Just think of it as deciding to refinance your home at a lower interest rate. You might consider that a simple decision if you were going to save a couple hundred a month on a house payment. This measure would allow the State of Oregon to do the same thing on projects it must finance. The good news is that the savings would be for you, the taxpayers," said the editorial board.[8]
  • The Oregon Daily Emerald supported Measure 72. "The bonds are estimated to save $5 million in interest for every $100 million issued. The only thing that changes is the way the money is borrowed. Vote yes on Measure 72 to save taxpayers money and give the state a better interest rate on construction projects with no direct financial impact," said the editorial board.[9]
  • The Wallowa County Chieftain supported Measure 72. The editorial board said, "The measure would not increase the general fund's debt capacity. It simply would allow financing the same items at a better rate. Recommendation: Yes. Just think of it as deciding to refinance your home at a lower interest rate."[10]

Path to the ballot

See also: Oregon legislatively-referred constitutional amendment laws

According to Section 1, Article XVIII of the Oregon Constitution, state law required a majority vote of both chambers of the Oregon State Legislature to place the amendment proposed by the legislature on the statewide ballot.

See also

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