It’s understandable that Gov. Paul LePage is hesitant about bonds. Reducing costs is a fine goal, and the 2013 budget shortfall must still be dealt with.
But instead of saying he won’t consider signing a borrowing package until “ out-of-control” spending is addressed, it would be more beneficial to work with lawmakers to define the long-term economic vision for the state.
He might find that bonds play into his development priorities.
Does it make sense to deny the Maine Community College System a bond to help it admit more future machinists, particularly when considering the expected growth in the occupation?
Roads and bridges are essential for private firms and regular people to be productive. Is it good business practice, then, to put off infrastructure bonds to another time when interest rates may increase?
What about not funding bonds for the Maine Technology Asset Fund — authorized by the Maine Legislature and voters — which provides grants for research and development and shows returns on every dollar invested?
The Maine Economic Growth Council releases a report each year that highlights the state’s progress toward economic growth. In its 2012 report, it indicates that areas of concern include research and development expenditures, transportation infrastructure and health care, among other things.
Because the state must legally have a balanced budget, it must ensure its ability to repay debt. LePage should not try to stop the conversation about bonds. Instead, he should expand it by describing where he believes investment will produce the greatest long-term outcome for Maine.
He would do well, for instance, to support the Appropriations Committee members, who have given preference to borrowing for projects that come with a federal or local match and are anticipated to have an effect beyond the 10-year term of the bond.
In fiscal year 2012, the state’s estimated annual debt service is about $95 million, according to the Office of Fiscal and Program Review. In 2013, it’s estimated at about $101 million; 2014, $87 million; and 2015, $72 million.
While those numbers may appear large, the same office projects that if the state issued $200 million in bonds, it would translate to 4.82 percent of the general fund in 2014-15. The point is not that the state should bond for that amount, but rather that there is the ability to do so.
The Appropriations Committee approved a bond package totaling about $96 million on Thursday. The important thing is that it focuses on specific ways to promote Maine’s long-term development.
“The more discipline there is in the Legislature to focus on an economic vision, the better outcome I think you have in determining a bond package,” committee co-chairman Sen. Richard Rosen, R-Bucksport, said Thursday.
Jodi Quintero, communications director for the House Minority Office, added: “Democrats continue to believe that we need to bond to create jobs and to get our economy back on track. Transportation is critical to that. So is [research and development].”
We’ll wait to see whether two-thirds of the Legislature will support the package, which was broken into five different bonds. The governor’s office has indicated LePage is open to compromise. Hopefully he will. Working with lawmakers will only benefit Mainers.
The best way to handle this administration is to go around it. This man is so unpopular, his policy initiatives so misguided and poorly managed, that he’s essentially powerless. He’ll be a completely lame duck by November. Thankfully.
Bangorian is right. The legislature will bond, some Rs and some Ds will
get together and pass a bond bill as a slightly more polite way of
holding up a middle digit.
Two more years of veto power can get alot of things done your way if properly employed.
Let “Lame Duckie” LePage have his fun for the next few months. He can threaten and bully all summer. Come January he becomes irrelevant.
Actually the man is quite popular. You spend too much time reading the leftist posts in these forums.
Wow, you’re really in denial, aren’t you?
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Try blackmail.
Try politics.
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Maintenance for roads should be part of a normal budget process. Lawn mowing should not be a bond issue.
Ah yes, LePage is quite good at blackmail. Just ask Millinocket.
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Voters have just automatically voted for bond issues in the past, without thinking about how money is paid back, so “payback” time has arrived. Now, the D’s are proposing more bonding, so will they get their way, since they seem to be in control?
Just cut DHHS 95 million and we will not need to bond.
And that fixes roads? Bolsters trade education (one of LePage’s good policies)? Etc. …
I suppose you would like to put that burden on hospitals? So the rich can keep their $72 million tax cut?
The state spends millions funding R&D. If the projects were really good, they would be funded by venture capital or private investors and these venture capitalists or private investors would have a piece of the action which could generate returns for them to fund future projects.
As it currently exists, when the state invests, they are funding mostly projects which couldn’t be funded otherwise, generally because they are high risk or don’t make sense business-wise. If the project is a failure, we eat all the funding costs. If the project is a success, we still eat all the funding costs, but the company shareholders get the profits. In the current model, we take all the risk and we don’t get any of the return if the project is successful.
If the legislators are insistent on spending on R&D, the program should be set up so the state gets equity in the investments and the program’s continuation is based on the success rates of these projects and the return in equity to the program.
Done right, the program could be self funding. Done wrong, it’s a big candy bowl the taxpayers are continually filling at a cost of many millions of dollars.
It’s not just Maine – this happens at the Federal at dollars amount to make your head spin. Corporate welfare is the real budget killer. Government should support education, roads, defense, infrastructure and health care and that’s it!
Corporate welfare is nothing but socialism and both parties support it. It has to stop.
why is it that the writer of this opinion paper did not bother to present the actual amounts of debt that we as tax payers are currently holding? they mention the debt service amounts, which are the amounts we are required to repay for past loans.
the writer is correct on one point, lepage should present his ideas on where the state should focus its resources…….. oh yea, by paying off our current debt! great idea.
take the money for methadone clinics and put it towards our debt’s would help.