Measure S, a controversial ballot measure on billboards in Santa Clarita, was defeated by city voters on Tuesday.

Approval of the measure would have ratified a deal between Santa Clarita and L.A. County’s Metropolitan Transportation Authority to tear down 96 billboards along the Metrolink railroad tracks and replace them with three digital billboards along the 14 and 5 freeways.

Opponents argued the freeway billboards would not serve as advertising platforms for local businesses, while supporters said the old billboards were a blight and the digital boards would give the city a new source of revenue.

About 56 percent of voters opposed the measure, according to the latest reports. The defeat prohibits the City Council from considering a similar deal with Metro for at least a year.

In other election results important to Valley businesses, Prop 1, a $7.5 billion state water bond, passed with 67 percent of the votes.

The bond was backed by leading Valley business groups because the measure will allocate millions of dollars to clean up polluted groundwater in the San Fernando Valley.

Also, two measures on health care were defeated at the polls. Prop 45, which would have given the state insurance commissioner authority to reject health insurer rate increases, was defeated with a 60 percent “no” vote. Prop 46, which would authorize drug testing of doctors and increase penalties for medical malpractice lawsuits, lost with a 67 percent “no” vote.

The insurance industry, including Health Net Inc. in Woodland Hills and WellPoint Inc.’s Anthem division in Thousand Oaks, spent heavily to defeat both propositions.