We Need Better Management, Not More Debt

Just over 4 months ago, tax payers approved a bond issue worth almost $72 million to fund transportation and infrastructure projects.  In the two previous elections, voters have approved about $80 million in bonds, most of it also earmarked for transportation improvements.  Add to that almost $700 million in so-called federal stimulus money for “shovel ready jobs”.  Maine should have raised a lot of additional money for roads.

So this week’s announcement that leaders in the majority party in Augusta would propose another $99 million bond issue for, yes, transportation and infrastructure projects has many people scratching their heads.

The central question is whether Maine can afford to keep borrowing.  We already spend millions every year to service existing debt and we certainly don’t want to pursue a course that puts Maine’s credit rating at risk.  We can’t borrow our way to a prosperous private sector economy, so we shouldn’t be taking on additional risk without first reducing and prioritizing spending. 

The more fundamental question is how this money is being managed.  We know that the bulk of the “stimulus” funds went to cover social service programs.  Instead of reforming these programs to bring expenditures in line with national averages, Augusta pumped in $300 million to fill the hole without making substantive changes to the programs.  We also know that the Highway Fund has been continually raided to fill past budget gaps.  Again, if Augusta had better managed those funds then, we wouldn’t be trying to borrow money to patch our streets now. 

This year’s annual budget crisis has been particularly painful because the downturn in the national economy has exposed Augusta’s self-inflicted fiscal wounds.  Maine came up almost a billion dollars short of paying for what it spends with revenue generated in this state.  That’s incredible for a state our size.  The borrowing and budgeting gimmicks aren’t going to work anymore.  We have to address these problems at a core level – and that means making the tough decisions about what services Maine should be providing and what we can realistically afford.

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