District 7

Roads, schools, parks, cultural sites, and sewer and water facilities are the backbone of our public infrastructure, and many are in need of repair or upgrade. Like most states, Maine issues bonds to pay for repair and upgrade of roads and other physical infrastructure. 

Bonding allows us to acquire matching funds from federal and private funding sources. 

Imagine if you were looking to invest in a new roof for your home to protect the infrastructure of the home so that interior damage does not occur. Then a family member steps forward knowing you do not have money for such repairs and says they will give you $5,000 if you come up with $5,000 to match what they give you. You are cash strapped so you must borrow from a bank to get the matching funds and of course you will have to pay interest to the bank on the $5,000 borrowed. But the money from the family member is free – no interest, no payback. What a deal, right? You will double your money, not to mention you are saving on repairs that will be more extensive and costly later.

The governor’s proposed bond package makes critical investments in energy independence, highways and bridges, passenger and freight rail, higher education, innovation and the environment.  

If enacted, the investment package will go to voters in two rounds of voting, with $265.8 million on the November ballot and $40.4 million on the June 2010 ballot. 

The governor’s package includes: $127.8 million for transportation projects, including roads, bridges, rail, ferries and aviation; $52 million for energy upgrades and building improvements at the state’s universities, community colleges and Maine Maritime Academy; $15.5 million for energy conservation and the development of offshore wind power; $67.5 million for competitive research and development grants, economic development and the redevelopment of Brunswick Naval Air Station; and $43.4 million for the Land for Maine’s Future, working waterfronts, clean water and environmental protection.

The governor’s bond proposal is simply that, a proposal. All bond bills before the Legislature have already had a public hearing and are being re-worked, discussed, vetted, and ultimately redrafted. They will be debated in both the House and Senate before being sent out to voters for their ultimate approval.  

It’s a dramatic investment, $306 million during three years, but necessary. President Obama’s stimulus package is a significant national investment, and now it is imperative that states step-in and do their part, generating investment and job creation.

In 2008, according to Moody’s Investor Services, Maine ranked 35th lowest in the nation with respect to net tax supported debt per capita, and 36th lowest in the nation with respect to debt as a percent of income. 

Maine’s tax- supported debt burden per capita is $618. The national median is $889. Wall Street gives Maine high marks for its tax-supported debt policies. During its entire history as a state, Maine has never defaulted on payments of principal and interest on general obligation or moral obligation bonds. 

In 1999, we enacted the ‘5 percent rule,’ – no more than 5 percent of the state’s annual revenues may be used to pay down debt. With respect to current bond issuance capacity of Maine and the 5 percent rule, the state could issue as much as $500 million in bonds if no other debt was issued and if the draw down of bond proceeds occurred over time. This package is a clear step in the right direction. It is a true investment in our future.

In closing, if I can ever be of any assistance to you or your family, please do not hesitate to contact me. I can be reached at home in South Portland at 799-8229, or in Augusta at 287-1515, or toll free, 1-800-423-6900.  I look forward to hearing from you.