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. Examines voter understanding and decision‐making in state and local bond elections, which are constitutionally mandated in many states and local governments. Only about 50% of voters can correctly identify what a bond is in a multiple‐choice format, even immediately after voting on a bond question, suggesting widespread confusion about this common financing mechanism. Providing voters with accurate information about bonds and their financing increases support for direct tax financing and decreases support for bond financing, indicating that voter preferences may shift with better understanding. The constitutional rationale for voter approval—preventing excessive debt burdens on current and future generations—is undermined by evidence that voters lack the fiscal knowledge necessary to serve as an effective check on legislative decisions.