When Gov. LePage announced that he would not go forward with responsible borrowing proposals Maine voters approved in 2009, he put the brakes on important investments that would put people back to work and give our economy the boost it desperately needs.
The governor is defying Maine voters’ express directive to issue bonds — just when there’s never been a better time to borrow due to record-low interest rates — and rebuffing the kind of affordable public investment that really creates jobs, such as airport and seaport improvements and redevelopment projects. The $40 million the governor is leaving on the table would generate 1,400 jobs for Maine workers.
The authority to issue these bonds — which the state sells to investors to finance various projects and then pays back with interest — expires five years after voters gave the go ahead. The governor suggests he might approve this borrowing in January 2014, mere months before the deadline, but that’s an unrealistic time frame. Large construction projects require upfront planning and engineering, competitive bidding is time-consuming and construction-friendly weather is only available certain months of the year. By the time all the preliminary work is done, the bonds will have expired on June 30, 2014.
Why wait? Why delay critical investments that will put Mainers back to work when Maine’s economy is already lagging behind the rest of New England?
One of the bond projects in question, an ocean wind energy farm near Boothbay Harbor, could stimulate a whole new business sector in Maine. Gov. LePage’s decision endangers funding to test new technology for the project and jeopardizes perhaps billions of dollars of investment in Maine’s future. Another project facing uncertainty is upgrading Eastport’s deep-water port, which some claim is the lynchpin to vast economic opportunity for Maine through an east-west highway. Incidentally, LePage is a big supporter of the east-west highway proposal.
Maine also stands to lose millions of federal or private matching funds that boost the buying power of taxpayers’ dollars. One day after the governor announced his decision, the executive director of the Midcoast Regional Redevelopment Authority, who is working to open new businesses at the closed Brunswick naval base and was counting on bond funding from the state, said the project could lose $1.7 million in federal matching grant funds. The money will likely go to another state also struggling to transform a closed military base.
Land for Maine’s Future, another initiative told not to count on its already-approved bond funds, routinely gets almost a three-to-one return on its investment for land purchases. Port improvements in Eastport and Searsport that will be put on hold also could lose federal dollars.
Gov. LePage has been outspoken about the need to “reduce red tape and regulation that stifle business growth.” But there is nothing that spooks businesses and investors more than uncertainty and delays, which increase costs. The projects for which the governor is now withholding bonds have been in the works for three years. Some have done planning and design work, some have negotiated complex legal agreements and some are partially completed. Other project managers have made promises to contractors or grant recipients who, in turn, have made business decisions with the expectation of receiving state funds. By refusing to issue bonds for pending projects, the governor is contributing to the very problem he rails against.
Issuing bonds voters have already approved to create Maine jobs should not be held hostage to politics. The investments these bonds would make possible will put money in the pockets of working families. Mainers expect our governors to be good stewards of our future and our economy. We need Gov. LePage to make responsible decisions that are good for our economic future.
Jody Harris is a policy analyst with the Maine Center for Economic Policy.