On bonds, vote yes for the economic future of Maine

Posted May 25, 2010, at 7:39 p.m.

On June 8, Maine voters will have an opportunity to give our economy a significant boost by approving millions of dollars in bonds for vitally important infrastructure while creating and preserving thousands of much-needed jobs.

It has been more than two years since the Great Recession officially began and unemployment in Maine stands at 8.1 percent. Though somewhat better than the national 9.9 percent unemployment rate, more than 57,000 Mainers are currently jobless, struggling to provide for their families while looking for work.

One of the greatest challenges facing policymakers and the public is how to create jobs for these Mainers, whose productivity and skills are admired the world over. When demand and private business activity are down, government can be a vital part of the solution.

Timely and targeted government investment in the economy works. The American Recovery and Reinvestment Act, commonly known as the stimulus, passed in 2009 with the support of Maine’s entire congressional delegation. It has saved or created approximately 13,000 Maine jobs. Through a combination of tax cuts, state fiscal relief, and funding for infrastructure projects, the stimulus helped slow the then precipitous economic decline of both Maine and the United States and begin the uphill climb back to prosperity.

The stimulus provides the foundation for recovery we must build upon. At the federal level, we need to extend unemployment and health benefits through the end of the year and provide Federal Medical Assistance Percentage funding through June 2011. Failure to do so will undo much of the stimulus’s progress and could cause the loss of hundreds of thousands of jobs nationally.

Relying solely on the federal government to fix Maine’s economy is unwise because federal action alone cannot ensure renewed growth. Other states are taking the lead in tackling difficult budgets and employment situations; Maine must do the same to emerge from the recession as quickly as possible and set the stage for sustained economic growth. We must not only bring about a quick recovery, but also ensure that Maine remains competitive over the long term.

That is why the ballot questions involving bonds are so vitally important. Approximately $108 million in bonds on the June 8 ballot targets investments primarily in transportation and other infrastructure projects. For example, Question 3 would help provide for the purchase of more than 200 miles of track belonging to the Montreal, Maine & Atlantic Railway in Aroostook County. This measure would save about 750 jobs in a region that Maine needs to be economically strong.

The four bonds questions allocate a total of $47.8 million for high-priority transportation projects, including the Aroostook railroad, expansion of rail service in Lewiston and Auburn, a deep-water port in Portland, and the Small Harbor Improvement Program; $26.5 million for investments in off-shore wind and related manufacturing and energy and infrastructure upgrades to Maine’s higher education system; $23.75 million for various economic development and job creation measures, such as the Communities for Maine’s Future Program and redevelopment of the Brunswick Naval Air Station; and $10.25 million for improved water quality, drinking water and wastewater treatment facilities. If approved, the bonds will leverage about $97 million in federal and other funds.

Collectively, these bonds represent a considerable investment in job creation and preservation.

These are prudent investments that do not play Russian roulette with Maine’s fiscal health. The bonds on the June ballot received bipartisan support from more than two-thirds of both the Maine House of Representatives and the Maine Senate. An analysis of an earlier, larger bond proposal concluded it would result in a debt service ratio for fiscal year 2011 well below the long-established 5 percent threshold for general obligations as a percentage of General Fund, Highway Fund and Revenue Sharing revenues. Moreover, Maine has historically retired its debt obligations faster than most other states.

Ultimately, economic prosperity depends on a healthy private sector, both in Maine and nationally. We must undertake actions in the long term to eliminate deficits that could spiral out of control due to factors like soaring health care costs. However, our immediate, short-term priority must be to create the jobs Maine needs to recover as quickly as possible from the Great Recession.

Yes votes on June 8 on Questions 2, 3, 4 and 5 will be key steps toward expanded economic growth and renewed prosperity for all Maine families.

Dan Coyne is the fiscal policy analyst at the Maine Center for Economic Policy.

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