Key Takeaways

• Voters in 39 states will decide 145 statewide ballot measures on November 3, with taxes, government revenue, and capital borrowing among the major themes.
• California’s Proposition 3 would preserve an estimated $5–$15 billion a year in high-earner tax revenue, while Florida’s Amendment 3 could cost Miami-Dade roughly $386 million beginning October 2027.
• For muni investors, revenue measures shape the credit behind the debt, and bond measures like Rhode Island’s $600 million package shape new supply.

Welcome back to The Muni Brief, a series on municipal credit and markets. In each installment, Senior Municipal Strategist James Colby examines current events, policy developments, and fiscal trends through the lens of the muni investor, covering topics both local and national.

Tuesday, November 3, is Election Day. And most everyone knows there is a possible reshaping of power in Congress, which has spending on political advertising running at a frenetic pace, projected to reach an all-time high of $11.6 billion, according to AdImpact.

Here are some of the significant ballot issues to be decided that will impact the issuance and performance of debt in the municipal bond space.

Voters in 39 states will decide 145 statewide ballot measures, alongside local propositions. There is no nationwide referendum; the national picture comes from the issues appearing across state and local ballots.

First: The Major Issues Across the U.S.

Second: Significant Proposals at the State Level

California Proposition 40: A one-time 5% wealth tax on covered billionaires, with exclusions including real estate and retirement accounts; 90% of proceeds designated for healthcare.

Potentially substantial temporary revenue, with uncertain collections and possible longer-term income-tax losses. It also does not stand alone. Competing Propositions 41 and 42 could prevent implementation depending on the vote and court interpretation: if either one receives more “yes” votes than Proposition 40, the wealth tax could be stopped even if it passes with a majority. For muni investors, that makes the outcome less a single yes-or-no and more a question of which measure wins the most votes.

California Proposition 3: Makes existing higher income-tax rates on high earners permanent.

Preserves a major revenue source beyond its scheduled expiration; the legislative analyst estimates $5 billion–$15 billion annually, varying with market conditions. For state credit, that is the difference between a revenue stream with an end date and one that becomes part of the permanent base.

California Proposition 43: Requires two-thirds approval for citizen-initiated local special taxes.

Would make it harder for local governments to secure voter approval for dedicated revenues. Local governments already need two-thirds approval for special taxes they propose; Proposition 43 would apply the same bar to citizen-led initiatives beginning January 1, 2027. This one matters most to local issuers, such as cities, counties, and special districts, whose future revenue growth could depend on those measures.

Florida Amendment 3: Raises the homestead exemption for non-school property taxes to $150,000 in 2027 and $250,000 in 2028, with subsequent inflation adjustments.

A substantial homeowner benefit that could reduce local government revenue. Miami-Dade estimates losses at current tax rates of roughly $386 million beginning October 2027 and $697 million beginning October 2028. Because the exemption applies to non-school taxes, the pressure falls on counties, cities, and special districts rather than school budgets.

Rhode Island: Five bond questions totaling $600 million:

• Higher education: $275 million
• Housing: $120 million
• Economic development: $100 million
• Cultural projects: $50 million
• Environmental projects: $55 million

A substantial capital program spanning several municipal sectors. Where the California and Florida measures speak to the revenue behind state and local credit, Rhode Island’s questions speak to supply: if approved, they authorize new general obligation borrowing across five sectors.

Final Thoughts

Election night headlines will be about Congress. The muni story will be written in the results that follow. Revenue measures like California’s Propositions 40, 3, and 43 and Florida’s Amendment 3 shape the base behind state and local credit. Bond questions like Rhode Island’s shape the supply that comes next. Both are worth watching the morning after, for anyone holding munis.