Senate Joint Resolution 48—Referred to the Electorate of Oregon by the Legislative Assembly of the 2010 Special Session to be voted on at the General Election, November 2, 2010.
Amends Constitution: Authorizes exception to $50,000 state borrowing limit for state’s real and personal property projects
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.
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.
Estimate of Financial Impact
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.
Explanation of Estimate of Financial Impact
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.
Secretary of State Kate Brown
State Treasurer Ted Wheeler
Scott L. Harra, Director, Dept. of Administrative Services
Elizabeth Harchenko, Director, Dept. of Revenue
Debra Guzman, Local Government Representative
(The estimate of financial impact and explanation was provided by the above committee pursuant to ORS 250.127.)