The Case for Another Bond Package as Soon as Possible

(Originally posted in Line Items, the blog of the Maine Center for Economic Policy)
by Mark Sullivan

On November 6, Maine voters handily approved three bond issues to fund transportation projects, clean water infrastructure and land conservation.

MECEP supported these bonds in the legislature and urged Maine voters to support them for good reason.  We forecast that together the bonds would create more than 3,100 jobs and generate over $377 million in economic activity.  As Jody Harris wrote in the Bangor Daily News on October 31:

Even while other states are starting to climb out of the recession, Maine lags behind the rest of the nation in new job growth and continues to face an uncertain economic future. With more than 50,000 Mainers looking for jobs, these bonds could greatly reduce the number of people not collecting a paycheck.

Unfortunately, it looks like a fourth bond for investments in higher education lost by a slim margin.  This is a great disappointment especially for the missed opportunity it represents to increase the education and skills attainment for Mainers looking for work or a better job, especially low-income adults.  Coupled with Governor Paul LePage’s ill-advised veto last spring of a $20 million research and development bond issue, Maine will lose out on a chance to realize significant economic benefits from responsible investment in the skills and capabilities of our people.

As MECEP’s Garrett Martin wrote in Maine Biz last April:

Jobs that result from such investment will pay well above current average wage levels and are exactly the kind of employment opportunities we should be encouraging.

With interest rates at historic lows, the case for bonds – which are sold to investors who are paid back, with interest, by the state – is even stronger. Maine has a proven record of prudent debt management and our credit rating is good. That keeps our borrowing costs low and means we have the fiscally responsible capacity to take on additional debt. Moving forward with a new legislature with new majorities and new priorities, Maine can build further on the base provided by the bonds approved this year. Bringing another package of bonds to the voters, as early as next June, makes good economic sense.  Creating new jobs and putting more money in the pockets of working families will pay huge dividends in greater shared prosperity among all Mainers.