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Economist: Now is time for Maine to borrow money

Alanna Durkin, Associated Press

AUGUSTA, Maine (AP) -- While Gov. Paul LePage pushes for a road and bridges bond to be approved this week to meet a timeline that he says will improve Maine's economy, a former state economist told lawmakers Tuesday that now is an excellent time for the state to borrow money.

The Appropriations Committee heard testimony from experts and representatives from the state's universities and community colleges as it began considering more than 30 bond proposals carried over from last session.

Among the proposals in front of the committee is a $100 million transportation bond. LePage and legislative Republicans have urged Democratic leadership to immediately advance the plan in order to get job-creating construction projects moving. Democrats say the state needs to take a thorough look at all the bond proposals and create a larger comprehensive package that includes funding for things like research and development.

Maine's economy continues to lag behind the rest of the country in its recovery from the recession, with only about 25 to 30 percent of jobs recovered compared to nearly 60 percent nationwide, said Charles Colgan, state economist in the '80s and now a professor at the University of Southern Maine. The state has the capacity to buy bonds, or debt sold to investors with the promise of repayment, and that interest rates are currently extremely low.

"This is an extremely important time to take advantage of unique circumstances of the national economy and of the Maine economy to get some things done," he said. "I know that there's a debate between (borrowing) sooner and less and more and later," Colgan said, in reference to the debate over LePage's transportation bond. "I would prefer sooner and more."

LePage once again called on the committee to advance his roads and bridges bond, saying that it needs to be approved by the end of the this week in order to get on the November ballot. His administration says the Department of Transportation needs the funding now to plan for future construction projects that will boost Maine's economy.

"Democrats have a choice," LePage said in a statement Monday. "They can do the right thing by supporting economic development and jobs or they can delay again."

Democrats say LePage is creating an unnecessary political fight, pointing to governor's recent change of heart when it comes to borrowing. LePage previously refused to sign off on more than $104 million last session in bonds already approved by voters until the Legislature approved a plan to repay the state's hospitals. LePage has since then moved those bonds forward, but several million dollars in bonds remain unissued.

Democrats say they need time to create a bond package, including proposals for transportation, education and research and development. Putting the bonds on the June ballot will not put any planned construction projects at risk, they say.

"We need the job creation. We need the economic development, and that is what a strategic bond package will do for us at this point," Democratic Rep. Peggy Rotundo of Lewiston, House chair of the committee, told reporters Tuesday.


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