Borrowing with a Purpose

Maine lawmakers are overdue in crafting a bond package for voters to consider. Last year, Republican stonewalling killed a modest bond package. Since then the state’s need to invest money in transportation infrastructure, research and economic development has only grown. This year, the governor and Democrats are taking a more reasonable approach of first determining needs and then setting the size of the package. So far, Republicans are amenable to this approach. They should keep working together to ensure a reasonable package that targets the state’s priorities.

Lawmakers have already submitted numerous bills seeking bond funds for a variety of projects. There’s a $75 million bond for the Land for Maine’s Future program and a $20 million bond for the same purpose. Fifty million dollars is sought to improve facilities within the University of Maine System, $15 million for the purchase of trains to ensure passenger rail service, and there is a request for $5 million for the Fractionation Development Center to purchase the equipment necessary for the initiation of the pyrolysis/gasification pilot platforms, which sadly are not explained in the bill. More requests are sure to come, with Senate President Beth Edmonds predicting more than $600 million in bond proposals.

Certainly, not all of these will even make it out of committee. Rather than proposing large bond packages – all for needed projects, no doubt – legislators would do better to work with the governor on developing a reasonable package that both Democrats and Republicans can agree upon.

The first task is to prioritize the state’s needs. Buying more land may help the state’s economy, investing in research and development certainly will. Making such decisions will not only help determine what is in the bond package, but also how large it is.

Arguments that it is unwise to borrow money in difficult financial times should not be heeded. With state money stretched and programs facing cuts and elimination, it makes even more sense to borrow money now for projects and infrastructure improvements that will boost the state’s economy. Further, Maine’s indebtedness is low, especially because it is retiring bonds annually and did not borrow last year.

Other states have long borrowed – at rates 10 or even 100 times what Maine has done – to invest in R&D, university infrastructure improvements and hiring. Maine has significantly increased its support for R&D, but its efforts pale in comparison to what others have committed, so the state is lucky just to not fall farther behind. One bond issue won’t reverse this situation, but it will help move Maine in the right direction.

Fortunately, Republican leaders have softened their stance on borrowing. Last year, they told the governor they wanted a smaller package, but when he significantly whittled down his request, they still rejected it. This time, Republican leaders are saying they are committed to a package, but like the governor have yet to commit to a dollar amount.

“I think the idea of investing in our infrastructure is a good idea. How much debt we want will be another question,” Senate Minority Leader Paul Davis said earlier this week.

Mr. Davis has asked the right question. Now the right answer must be found.