Washington School District Debt, SJR 8206 (1999)
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SJR 8206 became the 92nd amendment to the Washington State Constitution.
The official ballot title was, "Shall the constitution be amended to permit the state to guarantee payment of voter-approved general obligation debt of school districts, as authorized by law?"
|Washington S.J.R. 8206|
Text of measure
The language that appeared on the ballot:
The Law As It Presently Exists
The state government and local governments sometimes borrow money to finance the acquisition of property, construction of buildings, roads, or other improvements, or some other capital purpose. Governments pay interest on their borrowings, and the interest rate is set by the financial market. Governments with strong taxing power and a large tax base generally pay lower interest than governments with more limited authority to raise funds because they can demonstrate a greater ability to pay off their debts, making their debts a safer investment.
Because the state has strong taxing powers, and also because of a history of prudent management of state funds, the state pays a relatively low rate of interest when it issues bonds or otherwise borrows money. Although the state provides some funding for school construction, local districts often must incur additional debt to meet state matching requirements, or to cover capital costs for which state funding is not available. This debt is usually repaid with local property taxes. Compared with the state government, school districts have a much more limited ability to levy taxes or raise funds. Thus, they often pay interest at higher rates on bonds issued for capital purposes. This is particularly true for districts with small tax bases. The state constitution currently has no provision permitting the state to guarantee local school district debt.
The Effect Of The Measure If Approved Into Law
If adopted, this measure would change the constitution to specifically authorize the state to pledge its full faith, credit, and taxing power to guarantee the voter-approved general obligation debts of school districts. The measure would authorize the Legislature to prescribe the manner in which the state guarantees of school district debt would be accomplished. The measure provides that a state guarantee would not remove the debt obligation of a school district. State-guaranteed school district debt would not be counted toward the state's debt limit, nor considered state debt for other purposes. With the state guarantee backing their debt, school districts would be able to borrow money at lower interest rates, reducing the total amount to be repaid.
- State of Washington 1999 voter pamphlet
- State of Washington 1999 ballot measure election results
- State of Washington SJR 8206 Analysis
- SJR 8206 Election Results
- State of Washington SJR 8206 Arguments In Favor and In Opposition
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