Roads and Jobs

To oversimplify, Gov. Baldacci’s $175 million bond package offers the promise of a road and a job at the end of it. Transportation and economic development account for $145 million of the total package, which he hopes will also leverage considerable federal funding. It is a reasonably ambitious plan during an excellent time for borrowing.

The proposal, which will need support from the Legislature before going to voters, appropriately invests in biomedical research, a growing field in Maine with an impressive record of attracting funds many times greater than the seed money from the state, and in the University of Maine System to improve its technology and science offerings. These jobs represent the future for many college graduates who want to remain in Maine and find challenging careers. But the governor did not forget the state’s traditional industries, and his proposal to set aside $2 million for Agriculture’s Farms for Maine’s Future program was important recognition that local farms will remain essential here.

Transportation is less glamorous than biotech and evokes less emotional support than farming but it is at least as important. In fact, roads and agriculture are strongly linked: An efficient transportation network reduces the cost of production for all businesses, but especially for farming. Wholesale trade requires an average of 5 percent of its total costs for transportation; agriculture spends 9 percent. Reducing that number, through safer, more efficient highways and through the option of rail is a direct benefit to Maine farms and all Maine businesses.

The governor proposes to borrow $42 million for roads and bridges and $33 million for rail, marine and air links and alternative means of transportation. These funds, in turn, depend on leveraging federal funds, which are not certain, although Rep. Michael Michaud, who sits on the House Transportation Committee, already has proven himself to be a skillful legislator in obtaining needed funding. The key for Maine is to recognize the connection between its economic future and its ability to move people and goods in and out of the state less expensively than it can now.

The governor no sooner offered his $175 million bond proposal than some lawmakers were complaining that it was too large. It is substantial, but not unusual – in 1999 Maine approved bonds for more than $150 million. More significantly, during the previous economic slowdown, in ’95, Maine borrowed $182 million. Maine keeps an eye on its bonds by using a conservative measure of holding them under 5 percent of its General Fund and highway fund revenues. Other states in the region set levels at double or triple this amount. But even with the proposed $175 million, Maine’s debt would be safely under the 5 percent level.

With interest rates low and a generally rising unemployment rate, now is an ideal time to bond for needed investments that create immediate employment through construction and research projects, and that sustain employment over the long term with a stronger infrastructure. Lawmakers should support these goals enthusiastically.