The Bangor Daily News editorial on March 23, “Purse-strings Poliquin,” questioned my motive for encouraging a statewide discussion about our growing public debt, including the $4.3 billion pension shortfall for teachers and most state workers. The simple truth is that my so-called “agenda” is to urge Maine government to embrace fiscal discipline and prudence.
Fiscal discipline in the public sector is the foundation for building a healthy private sector economy. Entrepreneurs, and the jobs they create, are attracted to places where they don’t have to worry about tax hikes or service cuts to pay for out-of-control government spending or stifling public debt.
For example, Illinois recently raised personal income and business taxes 67 percent and 46 percent,
respectively, as it struggles to balance its state budget. Illinois taxpayers shoulder a $78 billion pension debt because public officials can’t find the courage to face the fiscal nightmare they created.
Businesses are closing or moving out-of-state, jobs are following, and residents are fleeing. Would you risk investing your company assets in Illinois? Would you subject your employees to those financial uncertainties?
The editorial claims that my comments regarding Maine’s public debt are wrapped in “the sky is falling” tones. Well, let’s look up:
- Forbes Magazine ranks Maine 50th, dead last, in “Best States for Business and Careers.”
- The U.S. Bureau of Economic Analysis lists Mainers as shouldering the nation’s sixth highest tax burden.
- Our expensive and complex business regulations chase companies out of state.
- Next year’s $450 million payment for the pension benefits and $4.3 billion debt is nearly twice what we invest to support our university and community college systems.
- In 10 years, the $850 million pension payment is projected to chew up roughly 25 percent of our state budget, crowding out funds for essential services such as public education.
- Retired Mainers increasingly change their state residencies to avoid the high costs of living, and dying, in Maine.
- Young workers and their families continue to leave, looking for better jobs elsewhere.
To Maine families and businesses, this is serious stuff. That’s why I’m on an outreach campaign to communicate the truth to our customers, the taxpayers of Maine, about our fiscal and economic reality including the public debt. It would be irresponsible for the state treasurer to remain silent.
During the past several weeks, I’ve spoken to concerned groups in New Sharon, Wiscasset, Farmington, Augusta, Lewiston, Auburn, Scarborough, Bangor, Waterville, Caribou, Warren, Trenton, Portland, Naples, Lincoln, Saco, and Windham.
Here’s more truth: The seven quasi-independent authorities created by the Legislature have accumulated $5.5 billion of debt by selling bonds to fund their programs. There are inherent incentives for these entities to continue borrowing and growing. The authorities provide cheap credit for good public purposes, like loans for college students and mortgages for first-time homebuyers.
Nobody I know in Augusta, including myself, wants to “seriously hamper access to capital,” as stated in the editorial. However, what is prudent is closer oversight of these authorities, which operate independently of state government yet still impact Maine citizens.
To my knowledge, none of the seven authorities are in financial trouble. But if anything does go wrong, we know to whom they’ll turn — the taxpayers of Maine.
The state government watchdog group, the Office of Program Evaluation and Government Accountability, recently reported that the Maine Turnpike Authority has spent lavishly on travel, expensive hotels and $157,000 of untraced gift cards, among other abuses of the public trust. The executive director resigned and, in my opinion, so should the entire board of directors. The MTA is the only authority board on which I don’t serve.
The bill that I’ve submitted to the Legislature for its consideration is far from “a power grab,” as the editorial implies. Its purpose is for the treasurer to assist the Legislature, and the taxpayers, in overseeing these authorities and holding them accountable.
Yes, adjustments will be needed if the state treasurer is more deeply involved in the borrowing process and if the voters are asked to approve some of this debt. I believe that these reasonable changes will result, in the long run, in a stronger private sector economy and more jobs — everyone’s goal.
I’m proud to be known as Maine’s “stingy banker” and “Purse-strings Poliquin.” It’s about time someone in Augusta takes our public debt seriously enough to explain it to those who pay the bills — the Maine taxpayers.
Bruce Poliquin in the Maine State Treasurer. His comments are as treasurer and not as a trustee of the Maine Public Employees Retirement System.