It’s understandable that Gov. Paul LePage is hesitant about bonds. Reducing costs is a fine goal, and the 2013 budget shortfall must still be dealt with.
But instead of saying he won’t consider signing a borrowing package until “ out-of-control” spending is addressed, it would be more beneficial to work with lawmakers to define the long-term economic vision for the state.
He might find that bonds play into his development priorities.
Does it make sense to deny the Maine Community College System a bond to help it admit more future machinists, particularly when considering the expected growth in the occupation?
Roads and bridges are essential for private firms and regular people to be productive. Is it good business practice, then, to put off infrastructure bonds to another time when interest rates may increase?
What about not funding bonds for the Maine Technology Asset Fund — authorized by the Maine Legislature and voters — which provides grants for research and development and shows returns on every dollar invested?
The Maine Economic Growth Council releases a report each year that highlights the state’s progress toward economic growth. In its 2012 report, it indicates that areas of concern include research and development expenditures, transportation infrastructure and health care, among other things.
Because the state must legally have a balanced budget, it must ensure its ability to repay debt. LePage should not try to stop the conversation about bonds. Instead, he should expand it by describing where he believes investment will produce the greatest long-term outcome for Maine.
He would do well, for instance, to support the Appropriations Committee members, who have given preference to borrowing for projects that come with a federal or local match and are anticipated to have an effect beyond the 10-year term of the bond.
In fiscal year 2012, the state’s estimated annual debt service is about $95 million, according to the Office of Fiscal and Program Review. In 2013, it’s estimated at about $101 million; 2014, $87 million; and 2015, $72 million.
While those numbers may appear large, the same office projects that if the state issued $200 million in bonds, it would translate to 4.82 percent of the general fund in 2014-15. The point is not that the state should bond for that amount, but rather that there is the ability to do so.
The Appropriations Committee approved a bond package totaling about $96 million on Thursday. The important thing is that it focuses on specific ways to promote Maine’s long-term development.
“The more discipline there is in the Legislature to focus on an economic vision, the better outcome I think you have in determining a bond package,” committee co-chairman Sen. Richard Rosen, R-Bucksport, said Thursday.
Jodi Quintero, communications director for the House Minority Office, added: “Democrats continue to believe that we need to bond to create jobs and to get our economy back on track. Transportation is critical to that. So is [research and development].”
We’ll wait to see whether two-thirds of the Legislature will support the package, which was broken into five different bonds. The governor’s office has indicated LePage is open to compromise. Hopefully he will. Working with lawmakers will only benefit Mainers.