May 21, 2018
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Bond questions stir debt debate

By Christopher Cousins, BDN Staff

The merits of deepening the state’s pool of dentists or preserving Maine’s farms, forests and waterfronts are recognizable for most people. What might cloud Questions 2 and 3 for some voters Tuesday is whether the state should borrow money when it is under such economic distress.
Question 2 asks whether the state should borrow $5 million to create a full-fledged dental school and upgrade community dental clinics. Proponents, such as Kneka Smith, associate dean of planning at the University of New England in Biddeford, say the money would create more dentists while increasing dental visits in Maine by some 60,000 a year. That number would be accomplished under the drills and suction tubes of dental students studying at the school and interning at upgraded dental clinics throughout Maine.
Though the University of New England has been involved in the proposal from its inception, approval of Question 2 would set up a competitive process open to any educational institution in Maine.
Smith said UNE would apply for the funds to supplement a range of medical-related degrees it already offers. “We’re a private university with a public mission,” she said. “We have a commitment to meeting the needs of the state regardless of the outcome of the awards.”
Frances Miliano of the Maine Dental Association said her organization supports Question 2 but views it as just the beginning of a solution to a complex and daunting problem.
“We don’t think that a dental school in the state of Maine is going to be the be-all, end-all that will end barriers to dental care in Maine,” said Miliano. “We do think it will be an important piece of the puzzle.”
Question 2 does have some resistance, though the Maine Ethics Commission lists four political action committees working in favor of it and none in opposition. Some newspapers, including the Bangor Daily News, have urged a vote against the borrowing package because it doesn’t make dental care more affordable, among other reasons.
Question 3 calls for borrowing $9.75 million for land conservation, working waterfront preservation and investments in state parks. Matched by $9.25 million in federal and other funds, that money would provide $6.5 million in state funds to the Land for Maine’s Future program, which has conserved more than 500,000 acres since 1987. The rest of the bond would provide $1.75 million to purchase “working waterfronts,” $1 million to protect farmland and $500,000 to preserve state parks. Those amounts would be matched nearly dollar-for-dollar by federal cash and other grant funding.
“Maine is the Disneyland of natural resources,” Gov. John Baldacci, who has long been a supporter of land conservation, said during an interview Thursday. “We have something for everyone in this state, but we’ve got to preserve it.”
Maine Department of Conservation Commissioner Eliza Townsend said land conservation has a history of bipartisan support among both legislators and voters. Since 1987, four out of five Land for Maine’s Future bonds have passed. A $5 million request failed in 1991, which LFMF Director Tim Glidden attributed to the fact that it was lumped into a larger bond question as opposed to standing on its own.
“The mood then was, if possible, more sour than it is now,” said Glidden. “Today, the program’s track record is more understood. People understand the value of land conservation.”
All three political action committees associated with Question 3, which are listed by the ethics commission, are in favor of its passage.
While some argue that lean times call for long-term infrastructure investments, others say borrowing only digs the fiscal hole deeper.
“We think that debt is the only grounds by which anyone would oppose these bond issues,” said Christopher St. John, executive director of the Maine Center for Economic Progress, a liberal think tank based in Augusta. “In our view, these two bonds represent good investments at a time when the cost of borrowing is quite low.”
St. John said Maine has a history of fiscally sound practices when it comes to borrowing.
“However you look at Maine’s bonded indebtedness, it’s relatively low per-capita compared to other states,” he said.
State Treasurer David Lemoine said Maine’s history of paying off bonds on a 10-year schedule — shorter than many other states’ government bonds — plus its policy of keeping bonded indebtedness to less than 5 percent of spending from the general and highway funds, have made investors friendly to lending Maine money, despite a less-than-perfect credit rating.
“We trade on the market at a much better rate than our Aa2 credit rating with Moody’s would indicate,” said Lemoine. Aa2 refers to a score given to the state by the credit firm Moody’s. Although the ranking is below a Triple-A rating, it is still considered high-quality with a very low credit risk. Maine ranks 42nd in the United States on the amount of debt it is carrying relative to expenditures.
In total, Questions 2 and 3 would cost Maine taxpayers approximately $18.4 million, of which $3.65 million would be interest.
Chris Cinquemani, a spokesman for a conservative think tank called the Maine Heritage Policy Center, said any borrowing by the state, especially in this economic environment, is unwise.
“We haven’t changed our position on debt,” said Cinquemani. “Our debt burden just continues to grow and it’s putting the financial security of our kids and grandkids at risk.”
The issues of debt and spending have been discussed heavily on the gubernatorial campaign trail. Among the three front-runners, only Republican Paul LePage would oppose one of the bond questions.
Independent candidate for governor Eliot Cutler said he supports both bond questions, though he would push for a more transparent process of formulating future bond proposals.
“The governor should present a proposed capital budget every year,” said Cutler. “That proposal should be a clear look down the road.”
David Loughran, a spokesman for Democratic gubernatorial candidate Libby Mitchell, said borrowing within strict guidelines is good for Maine.
“Both of these investments will pay off,” he said. “Maine is very responsible in our bonding, which is one of the reasons voters approve them so often.”
LePage’s campaign did not respond to a request for comment, though LePage has said as recently as Wednesday that he supports Question 2 because of the state’s severe shortage of dentists, but not Question 3.

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