Bookmark & share:

E-mail this page E-mail a letter to the editor Reader Comments (below)

Joseph R. Reisert 10/26/2007

On the whole, yes.

To make intelligent decisions about the three bond questions on the Nov. 6 ballot, voters will need to answer two questions: first, whether the state can afford to even think about borrowing right now; and, second, whether the expected benefits will justify our borrowing money to pay for them.

The answer to the first question is clearly yes. The state's overall level of bonded debt is low, our credit rating remains solid, interest rates remain favorable, and even if the voters were to approve all of the proposed bond questions, only a small fraction of the state budget (less than 5 percent) would be required to service the debt.

That one can borrow is not itself a reason to borrow, which is why I drive an 8-year-old minivan, not a new car. I could make payments on a new car if I had to, but I don't because I prefer to spend the cost of car payments on things my family values more.

Likewise, the state should borrow only if the value of what we plan to buy with the borrowed money is greater than the value of what we have to forego in order pay back the loans. For the sake of argument, let's assume that the alternative to the state's paying interest on the proposed bonds is to allow taxpayers to keep the money, presumably by lowering taxes.

Let's assume also that our highest priority is getting the state out of its perennial place at the top of the tax rankings. Cutting taxes would help improve our state's overall tax ranking in two ways: both by reducing the overall amount of taxes paid but also, over time, by increasing incomes, since lower taxes tend to favor economic growth.

If we think of that incremental improvement as the baseline, the question whether we should approve the three bond questions can be boiled down to this: Does the proposal promise to produce so much economic growth that the costs of paying back the debt will be more than offset by the increase in Mainers' incomes?

Of the three questions before us in November, the education bond (Question 3) is the most compelling. That question asks whether we want to borrow $43.5 million in order to fund improvements to the University of Maine, the state community college system, and to other educational institutions in the state.

In the global marketplace, Mainers cannot compete against foreign labor on the basis of price. We must compete on the basis of productivity. If we want Maine to have good, highly paid jobs, we will need to ensure that we have a well-educated labor force. Graduates of the community colleges and of the state university tend to remain in the state. Investments in those institutions are, therefore, in a very real way, investments in the people of Maine and our collective economic future.

The research and development bond (Question 2) is a closer question for me. It calls for the state to borrow $55 million, with most of that amount to be allocated to the Maine Technology Institute. The money would allow Maine-based researchers to compete for grants, in order to undertake work related to improving specific aspects of Maine's economy. I do not particularly like the idea of the state putting public capital to work in private ventures, but the unfortunate reality is that Maine must compete against other states that make such research funding available far more generously than we do, or risk losing valuable jobs and industries to those states.

Question 4 asks about issuing bonds to finance a different sort of investment -- one that is harder to justify on economic criteria alone. It calls for the state to borrow money to spend on land conservation, habitat preservation, and other forms of investment in the environment. More than the others, Question 4 calls for a choice about the kind of place we want Maine to be and what we're willing to pay for to preserve it.

On Nov. 6, we'll get to decide.

Joseph R. Reisert is associate professor of American Constitutional Law and chairman of the Department of Government at Colby College in Waterville.

Bookmark and share this story: