2013-11-01 / Columns

Politics & other Mistakes

The price you pay
By Al Diamon

I recently received a shocking secret recording of statements made by Republican Gov. Paul LePage.

No, not the one uncovered by blogger Mike Tipping in which LePage falsely claims there’s a $47 million budget surplus, that nearly half of able-bodied Mainers are unproductive slugs and that he has a big lead in the polls in his bid for a second term.

There’s nothing shocking about the governor saying stuff that’s completely false. He does it all the time.

What makes my recording different is that it contains statements by LePage that are accurate.

“It is our duty as public servants to ensure each taxpayer dollar is spent appropriately to earn the highest return at the lowest cost. That is especially true when we are spending borrowed money – money that has to be paid back by future taxpayers, with interest,” LePage said. “Until our debts and more importantly, our spending are back under control, adding more of a burden would be fiscally irresponsible.”

I can’t reveal the source of this secret statement – otherwise, it wouldn’t be secret – but I can say it bears a close resemblance to a June 2012 letter from the governor explaining why he was refusing to authorize the sale of bonds approved by voters in 2010.

“I cannot personally support any of these bonds and will not vote for them at the polls in November,” LePage said in another surreptitiously recorded remark that closely parallels a statement he sent to the Legislature in May 2012. “Even with the voters’ authorization to borrow this money, my administration will not spend it until we’ve lowered our debt significantly. That could be several years.”

Since making those remarks, the governor has agreed to issue most approved bonds, but only after the state paid off its $186 million debt to Maine’s hospitals – using money it borrowed against future revenue it will receive from a new wholesale liquor contract it hasn’t yet negotiated.

So, Maine went from owing the hospitals a load of cash to owing the same amount (plus interest) to a bunch of bondholders, which is either a form of debt reduction worthy of a Nobel Prize in economics or an example of political bull pucky.

All of which brings us to the Nov. 5 ballot, when voters will be asked to approve five bond issues that will produce $150 million (plus $33 million in interest) in new debt.

That will add to our current bonded debt of more than $400 million in principal and interest. That doesn’t count bonds that have been authorized but not yet issued, which amount to over $200 million.

Right now, our borrowing is costing us nearly $100 million a year. If all the bonds on the November ballot are approved and the pending bonds are sold, that figure will increase by about $80 million each year. That money will not be covered by liquor sales, because we’ve already spent the next decade’s worth of those profits. So, I guess it’ll have to come out of your taxes.

Here’s what you’ll be asked to approve.

Question 1 is a $14 million bond issue to upgrade and repair Maine Army National Guard facilities around the state and to purchase land for machine gun training facilities. It carries interest costs of $3 million, but it also makes the state eligible for another $14 million in federal funds. There’s no question these buildings are in need of work, but there is some question about whether we need 34 aging Guard facilities scattered around the state. I’d feel a lot more comfortable voting for this if somebody could explain why consolidation doesn’t make sense.

Question 2 calls for $15.5 million for improvements at the University of Maine System, which – given its declining enrollment and elimination of programs – could certainly stand improvement. But before we borrow heavily to do that (this bond will cost us $3.4 million in interest), maybe we should consider merging some of the smaller campuses and unifying the university and the Maine Community Colleges systems.

Question 3 is the biggie, $100 million for highways, bridges, ports and a variety of other transportation projects. While there are certainly boondoggles hidden in this package, much of the work is needed, and the $154 million in additional funding it will allow Maine to grab from the feds and other sources makes it the most worthwhile item on the ballot.

Question 4 calls for $4.5 million for a new science facility at Maine Maritime Academy in Castine. It would open the way to another $10 million in private investment – and nearly a million in interest costs.

Question 5 is for $15.5 million for the aforementioned community colleges. Some of the same objections I raised to Question 2 pertain to this item.

Question 6 isn’t on the ballot, but it ought to be. It should read, “Do you want to reduce the amount Maine owes each year for debt payments by refusing to spend money we don’t have in the vain hope we’ll be rolling in dough when the bill comes due?”

I’d be voting yes on that one.

Secret recordings can be emailed to me at aldiamon@herniahill.net.

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