The Smart Money: Maine's bond measures

Posted Tuesday, October 29, 2013 in Analysis

The Smart Money: Maine's bond measures

by Gina Hamilton

The state has several bond measures on the November 5 ballot, and they haven't received a lot of media coverage.  Bond measures never do, they're the hidden part of doing the people's work when the budget doesn't permit very large expenditures in a given biennium.  The bills don't come due for a while, and if interest rates are low, it's hard to even recall that Maine has a certain amount of indebtedness that isn't tied to Medicaid payments.

Maine's debt, per capita, is lower than the average of the other states by far.  If each of us chipped in $845, Maine would be debt-free, compared to $1,117 on average everywhere else.  Maine doesn't have a debt ceiling, which makes bonding an attractive way to solve immediate needs, and many bond items come with federal dollars that make them even more attractive.  Examples include transportation bonds, affordable housing bonds, and the like.

So the brouhaha this year about whether the governor would allow some transportation bonds to be sold was unfortunate from a number of standpoints.  Maine really does have bad roads and poor public transit, and the bonds in question, if sold, would have triggered a federal match of an equal or greaer amount to which Maine would have ultimately become indebted.  Plus, the jobs that would have been generated would have been incredibly welcome. And tourists are more likely to show up if they don't have to destroy their cars and RVs and boat trailers to do it.

This year, there are five bond measures on the ballot.

This bond measure would pay for the improvement of armories, to make them gender compliant, and to provide funding for the purchase of land to be a National Guard training facility.  That piece, at least, would trigger federal funding. There is no question that the armories have significant deficiencies - most were built in the 40s and in many cases, no improvements have been done since.  Doing energy efficiency work would likely save more than would be spent, over time.  The armories also are used as community centers in many locations around the state. 

This one is self-explanatory.  The funding is needed by the University of Maine system to improve education, and to improve laboratories and classrooms throughout the state.  No federal match would be triggered by this question.  However, the state does not incur the debt.  Any bonds issued by the University of Maine are paid for by the University system, not the state or taxpayers.

This is a transportation bond, and will be matched by $154 million in federal and other funding, making Maine Department of Transportation's buying power much greater.  This additional benefit is added to additional stimulus factors in the communities where the work is being done.  People who have jobs directly or indirectly because of the work pay taxes and make purchases that they wouldn't otherwise make, and therefore, other people have jobs they wouldn't have, pay taxes and make purchases, and so on.  So a transportation bond, in addition to getting necessary work done, is also a form of fiscal stimulus, important in a state where job growth has been sluggish following the end of the recession.

The Maine Maritime Academy is a public post-secondary college and nautical training institution with approximately 800 students, located in Castine.  It is one of six nautical colleges in the U.S., training merchant mariners as well as engineers, marine scientists and biologists, and other marine and energy-based careers.  This bond would pay for a science center, and other funding, including corporate funding, would be added to the state bond.

This bond is similar to the University of Maine bond, except that, as a land grant organization, the UMaine system can issue bonds on its own, and the community colleges cannot.  University bonds are often voted for in years when community college grants are not.  However, the community college system serves far more students than the University does, costs less than the University does, and often produces a working adult in two years rather than four. 

However you choose to vote on the bond measures, please do vote on November 5.

blog comments powered by Disqus