AUGUSTA, Maine — He won’t say how much, but Gov. John Baldacci says he will propose to the Legislature a “significant” research and development bond package and a transportation bond.
“Cutting-edge technologies are going to be where investments go, where the jobs will go,” Baldacci said in an interview. “It’s going to be important to us that we continue to be putting into this effort so we don’t lose ground because as soon as you stop doing this, you lose ground. So we have to find the resources to keep doing this.”
He said he will propose a bond package for research and development, but declined to set an amount. He said that would depend on the budget and the Legislature with a two-thirds vote needed to send a borrowing proposal to voters.
“There are some bright spots in those areas where we have invested, and I want to make sure we continue to have progress,” he said.
Voters approved a $50 million R&D bond package in 2007, and not all of those bonds have been issued. But it was a close vote. The bond was approved by just over 6,000 votes out of 270,000 cast, and it was defeated in six of the 16 counties.
“We know we need to sell the Legislature and then convince the voters,” said Rep. Nancy Smith, D-Monmouth, co-chairwoman of the Legislature’s Business Research and Economic Development Committee last session. “We on the committee, in a bipartisan manner, know this is important and support a bond issue.”
Sen. Jon Courtney, R-Springvale, agreed. He was a member of the committee last session and was elected assistant GOP Senate leader for this session.
“I think there is support for R&D because we know it works,” he said, “but in this economy, I don’t know how much we can afford to do.”
The research and economic development committee suggested several bonds at its last meeting, including $50 million for R&D. But Smith acknowledges the amounts and purposes discussed by the panel represent what should be done to bolster the state’s economy, not what can be done.
“I think what is going to be key is convincing our counterparts in the Legislature that this is countercyclical,” she said. “When the economy is stressed is when we should be doing bond issues, not reducing our investments in the future.”
Courtney said many members of his party agree, but there are GOP lawmakers who will not support bonding at all and others who will not want to increase the state’s debt.
“I think we will be putting a bond package out to the voters,” he said, “but it’s way too soon to be putting numbers on them.”
Figures from state Treasurer Dave Lemoine indicate that over this budget year and for the next two-year budget cycle, Maine will pay off $208.8 million in bonds for the state’s General Fund and its highway fund. But voters already have approved bonded debt increases over that same time frame that total $240 million.
As bonds are sold, the state starts to pay down that debt, so the state’s bonded indebtedness is a figure that changes as the state sells bonds.
Baldacci acknowledged that convincing lawmakers and voters to borrow to invest in the state’s future for R&D and transportation infrastructure needs during a recession will be difficult.
“I am convinced we have to continue to make investments in our future,” he said. “I think a good case can be made.”
Complicating the process is that state revenues that fuel the highway fund — the tax on gasoline and diesel — continue to fall below projections. That means less money to pay the bonded debt for road projects.
“We need to be investing at a time when we don’t have enough money,” Smith said. “But that said, we will be battling with very valid concerns in health and human services and education.”
The state is short $142 million this year in the General Fund as several revenue sources are below projections, and the revenue forecasting commission expects that trend to continue through most of the next two budget years. The governor has already used his executive authority to curtail spending and will ask lawmakers to pass emergency legislation next month to bring the budget into line with revenues.
Lawmakers then will have to pass a two-year budget, and how much is allocated to pay for additional debt service will affect both the amount and timing of any bond package.