* About 90 pct of bond proposals were approved
* New debt will likely boost the muni bond market
* California passes tax increase to avoid school budget cuts
By Hilary Russ
Nov 7 (Reuters) - U.S. voters approved at least $30.8 billion in new state and local government debt on Tuesday to pay for schools, roadways, parks and other infrastructure projects - a likely boost for the municipal bond market.
California's Proposition 30, a temporary tax increase to help the state avoid budget cuts for public schools, also passed on Tuesday, along with some other major tax measures on other state ballots.
A total of about $34.2 billion worth of bond measures were on local ballots across the country overall, according to data company Ipreo.
Not all referendum results were counted late on Wednesday.
Voter approval for new debt could provide a boost to the $3.7 trillion U.S. municipal bond market, which has seen lower volume as state and local governments cut budgets to the bone during the recession.
States, cities, towns and school systems have also been sensitive to borrowing amid concerns about an excess of debt across the globe.
"The strong performance of a lot of these bond measures across the country is validation of voters' interest in seeing appropriate and reasonable public capital spending taking place," said Chris Mauro, head of U.S. municipal strategy at RBC Capital Markets, on Wednesday. "That's a really good sign for our market."
In California alone, voters approved $12.8 billion of the $14.8 billion in bond measures that were on the ballot, the most of any state. San Diego public schools won voter approval for their request for $2.8 billion to fund new construction and upgrade facilities and technology.
And in Texas, voters gave their nod to $5.4 billion of bonds, nearly all of the $6 billion of bond measures on which they cast ballots. The Houston school district won approval for $1.89 billion to pay for building and remodeling schools.
Some municipal bond market participants feared that worries about the economy could lead to more "no" votes on bond issues.
More than 75 percent of the state-wide bond proposals passed, said Daniel Berger, senior market analyst at Municipal Market Data, a unit of Thomson Reuters.
All of the three biggest state-level issues passed, including $1.3 billion in Arkansas for transportation projects. The bonds will be backed by a new and temporary 0.5 percent sales tax.
Voters also approved $750 million of bonds in New Jersey to fund capital improvement at its public colleges and universities. And in Alaska, voters approved $453.5 million of bonds for transportation.
Hundreds of cities, towns, counties and local school districts also saw bonds approved. In Connecticut, the Metropolitan District, which provides water and sewer services to eight municipalities, won voter approval by a 3-to-1 margin for $800 million of borrowing to fund the second phase of its mandated sewer improvement project.
"Despite the economic circumstances and despite the austerity that people have been living through at the state and local level, most voters are still very supportive of public sector capital spending," RBC's Mauro said.
Many ballots also contained tax measures. A key tax proposal passed in California, where voters approved Proposition 30, championed by Governor Jerry Brown. The temporary increase in income taxes for the wealthy and a temporary sales-tax hike will help the state avoid education spending cuts.
Brown declared victory for his tax measure to protect school spending, saying the state had defeated cynics who believe government could do no good. Standard & Poor's Rating Services said on Wednesday that the increase would bolster the state's budget in coming years.
Voters rejected most proposed tax cuts, according to the National Conference of State Legislatures, with Florida voters shooting down a state revenue cap.
"Most of those [tax cuts] that were approved were symbolic," the NCSL said in a statement, noting, for example, a constitutional amendment in New Hampshire that would have prohibited income tax - which it currently does not have anyway.
Voters also cast ballots on additional revenue-generating measures in some states. For example, the states of Rhode Island and Maryland won approval from voters to expand state-run casino gambling operations.
Other issues cropped up, too. In Michigan, voters repealed Public Act 4, a controversial law that had enhanced the state's power to intervene in financially stressed local governments. Repeal of the law could open the door to municipal bankruptcies in the state, Governor Rick Snyder said on Wednesday.