Bonds on the Ballot: What Voters (Don't) Know About Debt Financing and Why It Matters

Abstract American subnational governments commonly require voters to approve bond proposals, reflecting historical concerns about legislative shortsightedness. Yet voters need an understanding of how bond financing works to make choices consistent with preferences. Existing literature makes it unclear whether voters have such knowledge. Using original survey data, we find only about half of voters can identify how bonds are financed. An experiment shows that simple cues can change voter preferences for using bonds or taxes. These findings cast doubt on whether bond elections reveal true preferences and suggest there may be better means to prevent poor bond decisions.