Why ballot measures may be the way to fund city projects that spur economic growth

Wed, 2013-12-18 06:00 -- Liz Enbysk

With federal financial help unreliable at best due to belt tightening and Congressional gridlock, a new report from the Brookings Institution Metropolitan Policy Program suggests local and state leaders may find ballot measures a useful funding tool for projects that strengthen their economies.

“The federal government is no longer a reliable partner in helping states and metro areas address the myriad economic challenges they now face,” said Jessica Lee, Brookings senior policy analyst and associate fellow, and co-author of the report along with Marc Muro and Bruce Katz. “As a result, state and local leaders are experimenting with alternative ballot-driven financing vehicles, including bond issues and sales tax increases, to make large-scale economic investments that benefit their communities.”

According to the report -- Using Ballot Measures to Drive Economic Investment in States and Metropolitan Areas -- ballot-driven public investment in innovation, education and infrastructure have proven especially popular with voters at both the state and regional levels. Examples it cites:

  • Ohio’s investments in its Third Frontier technology-based economic development initiative

  • Los Angeles County’s Measure R funding critical transit investments

  • A $750 million bond issue for New Jersey’s postsecondary institutions

The report also provides examples of the types of ballot measure options available at the state and local levels and describes the factors that should be considered before choosing to move forward with a ballot-driven effort.

It also addresses concerns sometimes raised about ballot measures being used by special interests to persuade uninformed voters to approve bad ideas, but suggests scholars have found little basis for such concern.

“All legislation—whether enacted by elected officials or through the ballot box—has the potential to produce negative outcomes. While some initiatives and referendums have had detrimental results, ballot measures still represent an important tool that states and metros can use to fund investments in economic growth,” said Lee. “Measures that provide funding for improving infrastructure, cultivating a skilled workforce and boosting innovation can help states and metros strengthen their economies for the decades ahead.”

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