Maine’s debt

Candidate for governor Jim Longley has a hard enough fight to defeat a popular incumbent without placing at the core of his campaign taxation issues that few people take the time to understand. But by combining concerns about the state’s bond trend with the planned renovation of the State House, he has a good issue that may be too big to ignore.

Simply put, Maine is bonding more and more debt without asking for voter approval. The various authorities — Maine State Housing, Finance Authority of Maine, Maine Health and Higher Education Authority and several others — bond as part of their operation and are paid back through revenue sources such as mortgage payments or student loans. Normally, this makes plenty of sense — just as it makes sense for the average person to borrow to buy a house or go to college.

But the wonderful thing about going through the gantlet of the voting booth is that voters force government to thoroughly justify spending. An excellent example of why this is needed comes from the Government Facilities Authority, which was told by the Legislature to bond for $52 million to repair and renovate the State House and State Office Building. That’s a lot of money to fix up buildings, even considering that the buildings are in truly rotten shape.

What is interesting is that the sum did not start off as a lot of money. The original proposal was for a straight budget appropriation of $14 million to repair only the State House. The Legislature decided instead to send just $2 million of that in the form of a bond to the public, which approved it last year. So that left $12 million, right?

Don’t be silly. That left $17 million. The bulked-up proposal was introduced next session to really overhaul the State House, which, admittedly, really needed it. With the new proposal, however, came the inclusion of the facilities authority, which was to be put on the hook for $3 million to $4 million, with most of the rest coming from the state surplus. At around that time, someone noticed that the State Office Building was also in dire need of repair and that fixing it up so that more of it was useful would let the state save money on rental office space elsewhere in Augusta. The estimate for that repair started at $20 million, which was added to the State House repair for a total of $52 million.

What’s that you’re saying? The $17 million and $20 million don’t add up to $52 million? They do if you begin tossing in things like the reported $4 million underground walkway and the $110,000 rostrum for the speaker of the House. And while lawmakers were at it, they dropped the part about paying for the one-time expense from the surplus and put it all on the authority. No doubt the place is really going to sparkle once all the repairs are finished. Too bad that taxpayers will be too poor to afford to visit it.

That’s the danger in this type of bonding. The public doesn’t see a lot of it and so politicians, even those with the best of intentions, could easily be carried away by their desires without putting them in the context of the entire state spending plan. The result can be seen in these types of bonds, which 25 years ago totaled less than the general obligation bonds approved by voters. Now Maine carries $500 million in outstanding general obligation bonds and approximately $2.5 billion in the bonds sent through the authorities.

The argument should not be over whether $2.5 billion is too high but over whether voters are even aware that these authorities fund programs and activities this way. The Legislature made it more difficult last session for the public to participate because it removed the debt cap from the government facilities authority and made approval of new spending dependent on only a simple majority of lawmakers instead of the previous two-thirds. The changes mean that further debt could be approved easily by the majority party.

This largely eliminates the public — taxpayers — from the process, which has properly concerned Mr. Longley. Maine’s bonding strategies and options have evolved significantly in the last 25 years, but it is not clear that the Legislature’s understanding of them has. The state needs review of the way it takes on debt and an overhaul of a system the increasingly cuts out the public.