Gov. Paul LePage’s concern about debt and credit ratings is selective. Some borrowing is fine, especially if he proposes it. Borrowing for projects he doesn’t support, however, will hurt the state, he says.
On Wednesday, the day after Maine voters approved $15 million to support construction of affordable housing for seniors, the governor said voters had made a mistake, and he repeated his contention that the borrowing package was a bad idea. At the same time, however, he said voters were right to approve $85 million in borrowing for transportation construction projects that his administration proposed.
The housing bond, he told MPBN, would hurt the state’s credit rating. The people who buy housing bonds are different from the people who buy general obligation bonds, he said. In the governor’s defense, borrowing for housing projects typically takes a different form, but both bond packages approved by voters last week involve general obligation bonds.
So, the governor is mistaken about the $15 million senior housing bond’s effect on the state’s credit rating.
That rating has little to do with single bond questions, State Treasurer Terry Hayes said. The most important factor is the strength of the state’s economy, which is the best indicator of whether the state will be able to make good on its debt obligations. Last year, Moody’s upgraded Maine’s credit outlook from negative to stable, citing the state’s slow but stable economic growth, consistent revenues and spending cuts. Maine also ranked well for its debt repayments.
But to the extent individual borrowing packages could affect the state’s bond rating, the transportation bond, Question 3 on Tuesday’s ballot, would have a larger impact for the simple reason that it’s much larger than the housing bond, Hayes said.
The governor’s criticism of the housing bond — particularly after voters approved it — is troubling because LePage must sign off on the bond’s sale. And he hasn’t been shy before about withholding his signature on the sale of voter-approved bonds.
LePage has opposed the housing bond from the very beginning, arguing that the state could meet its senior housing needs through other means. He meant to veto the bond package, but it was one of 65 bills he was unsuccessful in vetoing. House Speaker Mark Eves, who has been at odds with LePage over many matters, especially the governor’s interference with his’ hiring as the president of Good Will-Hinckley, was the housing bond’s main sponsor.
But LePage shouldn’t allow his personal view of the housing bond interfere with whether he signs off on its sale. Sixty-nine percent of Maine voters approved it. That’s a strong message that voters understand the need for additional housing for the state’s elderly and that they believe borrowing then spending $15 million to address this need represents a smart investment.
When voters authorize a bond, they expect the state will issue it and direct the money to the designated initiatives. The governor shouldn’t stand in the way of fulfilling the voters’ intent.
