2010 Bond Impact on Jobs and the Economy
April 9, 2010 -
We cannot afford to pass up this opportunity. The bond package is critical to stimulating jobs and investing in our future.
In total, it will result in the protection and creation of nearly 3,000 jobs (see chart below for specifics). Additionally, we will likely see a multiplier effect of jobs and growth around key provisions such as the Portland ship berth, the dental school and the wind energy fund. These are investments that will help secure our economy for the future.
Failing to pass this bond package is “penny wise and pound foolish.” The Department of Transportation estimates that failure to rescue the MMA railroad could result in $60 million in road maintenance for repairs from wear and tear caused by truck traffic from the re-routing of goods previously shipped by the rail. That is three times the cost of purchasing the railroad.
Several opponents argue that the bond package should be smaller or that we should pull out individual projects. However, that argument pits the economic vitality of individual parts of the state against one another. The current package gives careful analysis to how the entire state can succeed and what ideas will appeal to the majority of voters who will ultimately decide its fate in June.
| Projects | Amount | Federal Match | Jobs Created |
| Purchase 241 Miles of Montreal, Maine & Atlantic Railway | $17 million | $0 | 750-1000 saved |
| Improved Freight Rail Service & Preparation for Passenger Rail Topsham-Lewiston/Auburn | $5 million | $0 | 120 |
| Mountain Division Rail-Western Maine | $5 million | $0 | 120 |
| Highway Maintenance | $34.8 million | $0 | 835 |
| Ocean Gateway-Portland | $7 million | $0 | 168 |
| Small Harbor Improvement | $1 million | $0 | 0 |
| Drinking Water Revolving Loan Fund | $2 million | $10 million | 304 |
| Wastewater Treatment Facility Construction | $3.2 million | $16 million | 460 |
| Maine Wind Energy Fund | $5 million | $24.5 million | 0 |
| Dental School | $3.5 million | $3.5 million | $35 million in payroll annually (Chuck Lawton Analysis) |
| Rural Dental Access Grants | $1.5 million | $0 | 0 |
| TOTAL | $85 Million | $54 million | 2,757 |
Maine State Credit/Bonding Capacity
The bond package is financially responsible. Maine has a conservative bonding record, strong credit, and track record of quickly repaying debt.
Opponents say this bond package is mortgaging our children’s future and that we keep piling debt on top of debt. In reality, Maine has a low debt burden and pays its debts quickly.
- According to Standard & Poor’s, Maine has a …"Favorable debt position with a low debt burden and rapid amortization of debt outstanding."
- The state has a "AA" bond rating from Standard & Poor’s, which is defined as "very strong capacity to meet financial commitments."
- According to Standard & Poor’s, Maine has the lowest debt levels in all of New England, with 1 percent personal income accounting for our tax supported debt.
- According to Moody’s, Maine ranks 33rd in terms of debt per capita.
- Maine is also 28th among states when you consider debt as a percentage of personal income.
- In this biennium Maine will payoff $168.1M in debt.
- Even considering that $78M in already authorized debt will be issued, this $85M package allows us to retire $5.1M more debt than we issue.
- Under even the most aggressive draw schedule (when we borrow and spend bonds) debt service is less than 5 percent of total General Fund, Highway Fund and Revenue Sharing revenues
- Maine’s total debt for General Obligation Bonds is $507.7M. Debt service for this package is $2.1M
