Parties debate which projects merit bonds

Posted Dec. 29, 2010, at 6:57 p.m.

AUGUSTA, Maine — Legislative leaders agree that the state will need to borrow for some infrastructure needs, but how much debt lawmakers are willing to assume — and for which projects — likely will show the philosophical differences between parties over borrowing.

“My feeling is that the kind of enthusiasm that we have seen for bonding in recent years under a Democratic governor and a Democratic legislature will not be what we see going forward,” said Senate President Kevin Raye, R-Perry.

But, he said, that does not mean there will not be a bond package during this session. He said there is GOP support for a “prudent” borrowing package for state infrastructure needs such as roads and bridges and water and sewer facilities.

“We have a responsibility to reduce the overall level of bonded indebtedness,” Raye said. “I think you will see that.”

House Speaker Robert Nutting, R-Oakland, agreed that there will be a borrowing package, and he agreed with Raye that the bond package would be smaller than in previous years. Nutting said his personal bonding philosophy is that some bonding is warranted for needed projects, but he said the bonds should be for things “that last a long time,” such as roads, bridges and buildings.

“There is a place for borrowing, a place for borrowing for long-term projects,” he said. “We have been too eager to borrow for things that we should pay for up front.”

Nutting said there has been too much borrowing for items such as research and development that have not, in his opinion, proven their worth when compared to basic infrastructure needs such as bridges, roads and water and sewer facilities.

“I think we need to look beyond a narrow approach and consider a jobs bond to help Maine recover,” said Sen. Barry Hobbins, D-Saco, the Senate minority leader. “We need to look at training and education and investing more in our people.”

He said that while Democrats are no longer governing but are the “loyal opposition,” that does not mean they will sit back and react to GOP proposals. He said there will be bonding proposals from members of his party to address where Maine should be investing to spur economic recovery.

“I believe that we need to look at the area of telecommunications development and alternative renewable energy areas,” Hobbins said.

He said additional investments in higher education facilities also should be considered as a part of any bond package that goes to the voters. He said that, like any business, Maine needs to invest in itself in order to grow.

House Minority Leader Emily Cain, D-Orono, said bond investments in areas such as research and development have already “paid off” for the state by generating even more research funds from the private sector and from the federal government.

“I know that the $50 million we invested in the 123rd [Legislature] has all gone out and has all been matched by one or five dollars or more and is creating jobs in businesses around the state of Maine,” she said. “We need to continue those investments.”

Cain said the state needs to invest more, not less, to help the state recover from the recession. She said there is a backlog of infrastructure projects across the state, as well as a lack of investment in the state’s most important asset: its people.

“We have to grow our economy, and that means investing more in our economy,” she said.

Nutting said that while he is willing to listen to arguments for greater investments, he noted that he has caucus members that will not vote for any borrowing.

“That is certainly a valid philosophy,” he said. “There are people that will not borrow to buy a car. They wait until they have the cash, and they think the state should do the same.”

Nutting said that underscores the need for the parties to cooperate in developing a bond package. He says it takes a two-thirds vote to send a bond proposal to the voters for their approval.

Hobbins said it is the voters who have the final say on whether to borrow money for projects through the bond process. He said lawmakers should let voters decide if they want to invest more in themselves.

Raye said that argument would be stronger if all state debt was approved by the voters. He said millions of dollars are borrowed by organizations such the Governmental Facilities Authority that the state is ultimately responsible for, even though voters have not approved the debt.

“We have to look at the whole debt picture,” he said. “And when you do, it shows a lot more debt than what the voters have approved.”

Lawmakers have until the end of next week to submit their legislative proposals. The LePage administration likely will outline its bonding proposal as part of the two-year budget due in February.

As of June 30, the total state bonded debt was just more than $1 billion, with about half of that in bonds approved by voters. The remainder is bonds issued by agencies such as the Governmental Facilities Authority.

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