No state borrowing was put before voters last year, a rare occurrence indeed. But then, Republicans winning control of the Maine House of Representatives, Senate and Blaine House also is a rare occurrence.
As the Legislature nears the finish line of this session, Democrats are putting bonds back on the table. Republicans should give serious consideration to approving the borrowing plan, which focuses on boosting and sustaining the economy.
Despite the likely hue and cry against bonding — the phrase “you can’t borrow your way to prosperity” is sure to be a refrain — Democrats are right in returning to this mechanism of paying for big-ticket items for several reasons. First among them is the clear need for investment in several key areas; such investment has been impossible in the last several years as the Legislature has scrambled to keep the budget balanced.
Rep. Emily Cain, the Democrats’ leader in the House, outlines five key areas where bond funding should be directed. They are roads, bridges and rail; research and development; educational infrastructure; water and wastewater treatment; and land conservation. These are areas that Maine voters have agreed to borrow and fund before, so they are likely to embrace such spending again.
Making the case for the road and bridge work is easy, Rep. Cain says. She’s right. Bond funding would not be applied to some new sexy projects, but rather to the Department of Transportation’s existing work plans. The state is behind on many of those projects, as anyone who travels Maine roads knows. Railroad improvement also would get some funding. Transportation bond spending produces jobs quickly.
A better way to support research and development has emerged in recent years. The Maine Technology Asset Fund was created to field grant requests. The fund needs to be replenished. Winning applications are those that join public, private and educational endeavors. And endeavors that boost business and create jobs also get high marks. This is investment that will see returns over the next decade, helping Maine turn the corner from relying on low-tech jobs toward jobs in biotech, marine science, innovative agriculture, composites and energy.
The educational infrastructure bond would pay for new or improved classrooms and labs in the state university system. This is part of the state’s recognition of the importance of focusing on STEM education: science, technology, engineering and mathematics. Giving lip service to the importance of these disciplines is not enough; we must provide the tools to teach them.
Water quality and wastewater treatment bond funds help municipalities upgrade or expand these essential facilities. Often, upgrades allow new commercial or residential development in a community, so in addition to providing for public health, spending in this area is a way to help the local economy.
Finally, the Land for Maine Future fund would be replenished with bond money. In recent years, the fund has paid to preserve working waterfront property and farms. All of what the program does enhances Maine’s quality of place, which is essential to our future.
Interest rates remain at historic lows, so the time is right to bond, even if the total borrowing is in the $100-million-plus range. The state treasurer is likely to predict that Maine’s bond rating will plummet, interest rates will rise and the sky will fall if bonds are put on the ballot. But voters will have the final say.
Rep. Cain notes that Maine typically bonds for 10 years, not 20 or 30 as other states do. The rule of thumb in Augusta is that payment for bonds — past and present — should not exceed 5 percent of General Fund spending. This group of bonds would remain in that range, she said.
Republicans in the Legislature should tweak the spending plans as needed, but prepare to support them. It’s time to return to investing in our future.