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The Impact of Initiatives on State and Local Government Finance  

Author:  Mary Colby.; Kim Rueben.; Kenneth Rust.; Kate McDonough.

Source: Volume 20, Number 04, Winter 2000 , pp.18-41(24)

Municipal Finance Journal

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Given that 26 states have initiative or referendum provisions, this NFMA panel, chaired by portfolio research manager Mary Colby, provides insights into the structure and impact of these forms of direct democracy. Policy economist Kim Rueben briefly reviews the rich 20-year history of California’s experience and comments on the wide-ranging impact on state and local finance. Portland’s financial management director, Kenneth Rust, reviews Oregon’s history of public finance initiatives and recommends a proactive strategy. For example, he discusses the use of preemptive bond issues and bond covenant language to establish a contract with bondholders that preserves local options in the face of otherwise very restrictive initiatives. Kate McDonough, managing director of a bond guarantee firm, elaborates on similar themes by way of a local case study.

Keywords: Direct legislation; public finance ballot initiatives; impairment of contract

Affiliations:  1: Schwab Investment Management, Inc.; 2: Public Policy Institute of California; 3: Bureau of Financial Management, Portland, Oregon; 4: AMBAC, Public Finance Division.

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