When Gov. LePage announced that he would not go forward with responsible borrowing proposals Maine voters approved in 2009, he put the brakes on important investments that would put people back to work and give our economy the boost it desperately needs.
The governor is defying Maine voters’ express directive to issue bonds — just when there’s never been a better time to borrow due to record-low interest rates — and rebuffing the kind of affordable public investment that really creates jobs, such as airport and seaport improvements and redevelopment projects. The $40 million the governor is leaving on the table would generate 1,400 jobs for Maine workers.
The authority to issue these bonds — which the state sells to investors to finance various projects and then pays back with interest — expires five years after voters gave the go ahead. The governor suggests he might approve this borrowing in January 2014, mere months before the deadline, but that’s an unrealistic time frame. Large construction projects require upfront planning and engineering, competitive bidding is time-consuming and construction-friendly weather is only available certain months of the year. By the time all the preliminary work is done, the bonds will have expired on June 30, 2014.
Why wait? Why delay critical investments that will put Mainers back to work when Maine’s economy is already lagging behind the rest of New England?
One of the bond projects in question, an ocean wind energy farm near Boothbay Harbor, could stimulate a whole new business sector in Maine. Gov. LePage’s decision endangers funding to test new technology for the project and jeopardizes perhaps billions of dollars of investment in Maine’s future. Another project facing uncertainty is upgrading Eastport’s deep-water port, which some claim is the lynchpin to vast economic opportunity for Maine through an east-west highway. Incidentally, LePage is a big supporter of the east-west highway proposal.
Maine also stands to lose millions of federal or private matching funds that boost the buying power of taxpayers’ dollars. One day after the governor announced his decision, the executive director of the Midcoast Regional Redevelopment Authority, who is working to open new businesses at the closed Brunswick naval base and was counting on bond funding from the state, said the project could lose $1.7 million in federal matching grant funds. The money will likely go to another state also struggling to transform a closed military base.
Land for Maine’s Future, another initiative told not to count on its already-approved bond funds, routinely gets almost a three-to-one return on its investment for land purchases. Port improvements in Eastport and Searsport that will be put on hold also could lose federal dollars.
Gov. LePage has been outspoken about the need to “reduce red tape and regulation that stifle business growth.” But there is nothing that spooks businesses and investors more than uncertainty and delays, which increase costs. The projects for which the governor is now withholding bonds have been in the works for three years. Some have done planning and design work, some have negotiated complex legal agreements and some are partially completed. Other project managers have made promises to contractors or grant recipients who, in turn, have made business decisions with the expectation of receiving state funds. By refusing to issue bonds for pending projects, the governor is contributing to the very problem he rails against.
Issuing bonds voters have already approved to create Maine jobs should not be held hostage to politics. The investments these bonds would make possible will put money in the pockets of working families. Mainers expect our governors to be good stewards of our future and our economy. We need Gov. LePage to make responsible decisions that are good for our economic future.
Jody Harris is a policy analyst with the Maine Center for Economic Policy.
Paul Richard LePage? Responsible decisions?! Don’t hold your breath. He gets his marching orders from ALEC and the Koch brothers.
Paying down the credit cards we already have before charging up new ones is just common sense…Something that is lost on Libs I guess…LOL…Atleast when it comes to other peoples money…
So although Mrs. C and I live in a mortgaged doublewide that we’re struggling to pay for, we should also borrow a large amount of the bank’s money to buy an expensive ocean front property because interest rates are low, the asking price is a few thousand dollars lower than at the peak of the bubble, and the transaction will benefit the local economy? And we’ll also get a matching break from the federal government with the interest deduction? This bond thing rocks.
I suspect ALEC and the Koch brothers (who pull LePage’s puppet strings) are actively trying to destroy state economies, and eventually the national economy.
They often make the argument that state and federal finances work exactly like an individual’s budget, which they surely know is not true.
If they push our economy to the brink of Depression II, or maybe well into Depression II, America will be at the mercy of the big corporations. Some citizens have already agreed to slash the social safety net, destroy unions, slash jobs galore (teachers, police, other public employees), turn schools and prisons over to private corporations, take away elderly people’s hard-earned pensions, and give up on America’s decaying infrastructure. Once we’re all destitute, we’ll be the peons the Koch brothers and their ilk love to exploit, gladly accepting pennies a day in wages and no job security or benefits.
What they don’t seem to grasp is that once their plan succeeds, there will be no middle class left to purchase the corporations’ products.
Jody needs a serious reality check ! LePage’s excitement over the E-W Highway is predicated on benefiting his Canadian campaign, and Maine campaign, contributor’s and nothing else. If Harris ever bothered to read the E-W Highway Act then he/she would see that this road is a NON-STOP COBURN TO CALAIS HIGHWAY WITH NO INTERCHANGE’S, SAVE ONE FOR GOING NORTH TO BALD MOUNTAIN ! Maine isn’t going to benefit one dollar from this project and, indeed, might just get taken to the cleaners, financially, when the eminent domain nonsense starts getting added up when the inevitable Road Bond’s have to be issued to cover Cianbro’s cost’s.
But to be fair, I do agree with Jody’s example of Fed matching dollars for Brunswick NAS’s facilities. Had Maine the’ smart’s’, that Paulie and Company are so clearly lacking, they would see that there own DECD has Bombardier looking at Brunswick for their aircraft manufacturing and repair business, not to mention their railcar business that can be accomidated on the current Maine-owned railline’s north of Brownville Junction. The current Brunswick labor market, which worked on Navy aircraft of all types for over 30 years, is still there and needs only a short ‘ramp up’ re-training to get cert’ed on the current FAA reg’s for working on these type plane’s that ‘Bomb’y’ both makes and repair’s. This feeds into the recent DOL Secretary’s statements about re-training programs for the long term unemployed, and with ‘Bomb’y making aricraft, our own returning vet’s who worked on Air Force base’s and Naval Air Station’s and carrier’s to come and find job’s. The recent statement’s regarding the Millinocket Thermogen plant hiring around 220, but having the indirect job ‘ripple effect’of over 1400 job’s, from truck driver’s and rail worker’s to the dock folk’s at Eastport, needs to be looked at and factored in as well. Bond investment, managed responsibly as in the Kestrel fiasco, can have a huge effect when it’s done correctly and responsibly. But to sit on it and tell the whole State ‘Stick it !’ out of personal bias and spite is nothing less than bending the entire State over a log and letting Misery and Cowardice ‘ have at’ Maine. And that is the real failure. It’s also a failure that’s going to be remembered come next election cycle.
The Governor has forgotten and maybe never understood that his “bosses” are the people of Maine. Maine voters approved these bonds and his job is to implement what the voters told him to do.
He is destroying Maine.