Utah State Treasurer Ed Alter said Wednesday the failure of a proposed constitutional amendment to allow some schools funds to be invested in private equity markets was likely a matter of a good idea presented in entirely the wrong circumstances.

It was the only one of five proposed changes to the state's governing document that did not achieve voter approval.

"The timing of this proposal couldn't have been worse," Alter said. "It was, and is, the right thing to do ... but not in the midst of a dark moment of national economic downturn."

Alter said the proposal, which garnered unanimous approval in both houses of the Utah Legislature in 2008, would have granted the same investment opportunities already allowed to state university endowments and the state employees' retirement fund. Seeking voter approval at a time when those very people are watching their personal investments, such as 401(k) funds, disappear before their eyes was an insurmountable challenge, Alter said.

Amendment E proposed a change to an 1896 constitutional restriction prohibiting investment of state and local government funds in stocks and bonds issued by private companies. A portion of those restrictions were eased in a 2005 change that allowed involvement with private companies seeking intellectual property rights on the products of research institutions. Amendment E would have extended the exception to schools funds and revenues derived from state-owned lands.

The other four proposals, lettered A through D, found overwhelming voter support and will take effect Jan. 1. They include a clarified succession plan for filling a vacancy in the governor's office, a new start date for the legislature that will not conflict with the federal holiday honoring Dr. Martin Luther King Jr., a rainy-day fund created with a portion of taxes collected on the extraction of the state's natural resources and a change to when the legislature is obligated to perform post-census redistricting duties.

Alter said the constitutional changes proposed in Amendment E would likely be revisited, but doubted it would happen in the 2009 legislative session.

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