Voters sign off on at least $67 billion in muni bonds as midterm ballots tilt pro-infrastructure

What happened at the ballot box

Early counts compiled by Bloomberg from S&P Global Market Intelligence indicate voters approved at least $67 billion in bond sales on Tuesday, out of no less than $84 billion that appeared on ballots. That proposed total was bigger than the roughly $81 billion debated in 2024 and far above the near $16 billion a year ago.

Not every question passed. In Texas, voters rejected a $1.6 billion package for the Cypress-Fairbanks Independent School District, and a $952 million proposal in the Irving Independent School District also failed.

Where the money is headed

Some of the largest items moved forward. In California, Proposition 37 permits $25 billion of revenue bonds to expand home-buying assistance, and voters also passed Proposition 1, which allows $11.25 billion in general obligation bonds for affordable housing.

Beyond California, Michigan voters approved $1.5 billion for Dearborn Public Schools to renovate aging buildings and construct new ones. In Washington, a $420 million plan aimed at upgrading the Snohomish County fire department's buildings looks headed for passage.

Those approvals arrive as state and local borrowers approach a record year for municipal bond issuance. According to Bloomberg, more than $500 billion in long-term municipal debt has been sold to date, roughly 6% above the comparable stretch in 2025. Market participants anticipate total borrowing will reach $600 billion by year end.

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Why borrowing is climbing

Aging infrastructure and higher project costs are pushing up borrowing needs. Inflation in recent years has lifted construction and materials prices, so governments need larger authorizations to fund similar work. Those dynamics point to bigger measures on the horizon, said Miguel Laranjeiro, who serves as investment director at Aberdeen Investments.

"We've seen an initiative in infrastructure buildout, and for three straight years, this being the third, all indications are that we will have another record-setting year of issuance," he said. "I think that is a good proxy for what we see going forward, continued elevated issuance as voters around the country look to update their infrastructure."

There is also visible pushback. Even though a rising portion of proposals is failing, the total dollar volume gaining approval is still increasing, said Jennifer Johnston, Franklin Templeton's director of municipal bond research. She linked some defeats to reluctance over potential tax hikes, including in fast growing Texas, where population gains are straining school capacity. "There are many communities in Texas that actually do need to issue capital facilities to build additional schools and buildings, so it does become a challenge for a school district to figure out how do you manage that growth in enrollment and the demand for facilities if you can't get voters to approve your bonds," she said.

What this means for your portfolio

A larger stack of approvals points to solid muni supply ahead, which can shape yields, credit stories, and the flow of new deals. Watch where the dollars go next, from housing to schools to public safety, because that mix will likely set the menu of bonds coming to market.

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