Voters’ widespread approval of increases to municipal finance provides counties with an economic boost.
On Tuesday, the majority of Oregon voters chose to impose taxes on nicotine, limit political campaign contributions, decriminalize illegal drug possession and legalize supervised use of psilocybin, the active ingredient in psychedelic mushrooms. Combined with federal election news, it is easy to overlook voters’ choice to approve $2.1 billion of bond measures.
Since bond measures raise taxes to fund public works projects, they tend to face more skepticism from voters when times are difficult. Despite 12,000 people in the state who are now jobless as a result of the COVID-19 pandemic, voters passed 80% of bond measures, including a school bond in east Multnomah County which had failed four times previously.
The approved measures will provide a healthier municipal bond market and an evenly distributed economic boost during a recession.
“Despite the pandemic, people are feeling pretty comfortable,” says Tim Iltz, investment manager of the Aquila Tax-Free Trust of Oregon. He says the vote is a signal of economic confidence. It may also indicate an economic recovery sooner rather than later.
It is hard to decipher the reason that voters were so bullish on bond measures. People may feel like they have more money in the bank due to not going out for entertainment.
It is also possible voters feet the need to give an economic boost to their area. Many of the bond measures were for public spaces like libraries and swimming pools.
Since Oregon has a personal income that is higher than average, the triple-exempt nature of municipal bonds makes them appealing to investors. The bonds also come at an opportune time. The turbulent nature of the stock market in recent months might make municipal bonds more appealing to those seeking to diversify portfolios.
Some of these public works projects were crucial to economic development. In Bend, voters approved $190 million for road renovations to alleviate congestion in the growing city.
In addition to creating contracting jobs, some of these bond measures help job seekers. Multnomah County’s $387 million library bond measure, for example, includes a resume writing assistance program.
Many of the bonds are directed toward rural economic development. Measure 33-103 in South Wasco County authorizes $4 million to improve school facilities.
Harney County passed a school renovation measure for nearly $15 million. Tillamook County approved a measure allocating $9 million for the renovation of the North County Recreational District Pool.
“For us, it means more supply [of bonds],” says Iltz. “This is a good sign for 2021 as far as municipal bonds are concerned.”
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