Borrowed bond money isn’t free

The people of Maine will be making a trip to the ballot box this June to pass judgment on a $60 million bond proposal recently approved by the Legislature. We are being told that we cannot pass on this opportunity to invest in our economy and bring matching funds to Maine. We don’t buy it and hope a majority of voters agree with us.

When the Legislature sends to the voters a referendum question or bond proposal, it ought to be a fair presentation. This bond question, like many before it, bundle several distinct projects into one big package, infringing on the constitutional rights of voters to approve state borrowing. While the ballot would be longer, the people ought to have the right to cast separate votes on each of the 10 initiatives rolled into the June bond. Unfortunately, it is going to be an all or nothing proposition.

If a presentation is going to be fair, it also has to be full. The $60 million bond question in June is just the beginning of the state’s borrowing requests for this biennium. But rather than present all the bonds at one time, they are sent to the voters in more palatable sizes lest the citizenry have trouble swallowing the total request.

A final point on process involves the June vote itself. In the vast majority of municipalities the only reason to go to the polls on June 10 will be this single bond question. This means turnout is going to be embarrassingly low.

Added to this is the $350,000 cost of holding the special election in June. In times when our communities are considering teacher layoffs and property tax increases, this is a burden they can do without. It seems especially ironic to pass this cost on under the guise of an economic development bond.

Voters who share our concerns about the process certainly would be justified in opposing this bond question. Those who want to focus solely on the merits of the question have plenty of reasons to be opposed as well.

Borrowed money is by no means free money. Every dollar we borrow has to be paid back in full with interest. Over the course of the upcoming biennium the state will spend $56 million of the taxpayers’ money on interest expense. This is more than we will spend on many state departments.

For all the talk of record low interest rates and healthy bond ratings, the simple truth is that the more you owe, the more you will pay in interest expense. Maine currently has $346 million in outstanding bond debt – that amounts to $275 for every man, woman, and child in Maine.

The amount we owe in issued bonds is just a piece of our total debt. We owe about $200 million in Governmental Facilities Authority bonds that were approved without voter approval in what many of us believe was a violation of Maine’s Constitution. In addition, $292 million more in bonding has been approved by the voters but has not been issued yet.

Our debt and potential debt amounts to almost $850 million dollars. This is more than 15 percent of our biennial budget. The $60 million proposal adds to our total indebtedness in fiscally challenging time when our focus ought to be keeping a lid on our debt.

A final concern is the actual economic impact of this bond question. We believe that using borrowed money to prime the economic pump is not a real solution. We ought to be focusing on improving Maine’s economic climate so our small businesses can compete in the global market place and our communities can attract investment.

If we are going to infuse borrowed money into our economy we need to be sure each and every project offers a return that can be measured in jobs and economic opportunity for Maine people. Otherwise, we simply cannot afford it right now.

The decision now rests with the voters. If you believe that our debt it too high, Maine voters have the right to an honest choice, and the $60 million in projects are not going to create jobs, you need to get to the polls in June and send that message.

Rep. Bob Crosthwaite of Ellsworth and Rep. Will Rogers of Brewer are both Republicans serving in their first terms in the Legislature. Rep. Crosthwaite is a member of the State and Local Government Committee. Rep. Rogers is on the Business, Research and Economic Development Committee.