The price you pay
Debt is a fundamental part of American life. Car payments. Mortgages. Partially unpaid bills from irate Colombian hookers.
In that way, the state of Maine is much like you or me. Except it has a lot more debt — about $1 billion — owed mostly to bankers and investment houses, but also to Quebec, New Brunswick and New Hampshire for sexual favors.
What? You thought they were just cuddling with us because they liked us?
Unlike many expenses, such as those associated with overactive libidos, debt payments are controllable. If you can curtail your baser impulses long enough to get out of the red, you can put yourself on a pay-as-you-go basis. All that cash you were using to cover principal and interest is now available for more worthwhile activities (nights of passion with Massachusetts and Connecticut).
Which brings us to the question of whether Maine should be issuing any new bonds this year. Bonds are just a political euphemism for debt, and the money from them — plus that nasty interest — will have to be paid back over the next decade.
A valid argument could be made that this is a sensible approach to funding infrastructure projects — roads, bridges, secret hideaways for trysts — since those sorts of things tend to last longer than the life of the loan.
But there’s an equally sensible point of view that says there’s no easier way to reduce the state budget than to halt borrowing. If, over the last decade, Maine had put a moratorium on new bonding and paid off all its outstanding general obligation bonds, currently about $500 million worth, it would have saved at least $150 million in interest alone.
That’s almost enough to cover the annual shortfall at the state Department of Health and Human Services.
I can hear the objections now. If we did something like that, the naysayers will claim, Maine would soon resemble a third-world country, with potholed highways, crumbling buildings and low-budget whores on every poorly maintained street corner.
Of course, much of the state already looks like that. Which brings up this question: Why aren’t we imposing a sales tax on prostitution?
But back to borrowing. For those who think Maine has been judicious in deciding when to incur debt, consider the choices legislators and voters made in 2010, the last time there were borrowing packages on the ballot. That year, bonds worth $123.5 million were approved, with the biggest chunk, some $48 million, for transportation projects. But not all of that went to infrastructure. There was money for all sorts of transit alternatives, many of which weren’t really long-term projects. There was also cash to buy a defunct railroad in northern Maine, because who wouldn’t want to own a railroad and get to play engineer.
In addition, the state accumulated red ink for water clean-up projects ($10 million), energy efficiency ($26.5 million), improved dental care ($5 million), buying public lands ($10 million) and a bunch of vague economic development proposals that in retrospect don’t seem to have had much impact on the economy ($24 million). By the time those bonds are paid off in 2020, the tab will have climbed another $30 million or so for interest.
No matter whether you’re a conservative Republican or a liberal Democrat, you have to believe there’s a better use for $30 million than lining the pockets of Wall Street executives. The former might use that extra dough to reduce taxes. The latter could employ it to maintain social services. Either one is a more attractive option than shipping those tax dollars out of state to pay off speculators.
And let’s not forget how much “companionship” you can buy for 30 large.
As Maine legislators ponder which of over $400 million in bond requests to approve this year, they should consider the value of rejecting anything intangible, unquantifiable, overly imaginative or promising results that seem to be too good to be true. A narrowly focused bond issue for maintaining existing infrastructure, something in the neighborhood of $30-$50 million, makes some sense. But anything more is just adding to future budget crises.
No borrowed money for buying public lands. Our current state parks are in disrepair, conservation lands are poorly managed, and there are no funds available to remedy any of that.
Nothing for research and development, an amorphous category that devours funding faster than producing a “John Carter” movie. But Hollywood execs at least know where their money was wasted. The state has almost no monitoring in place to judge the effectiveness — or lack thereof — of its R&D investments.
Forget about funding new higher education facilities. Until the University of Maine System gets its haphazard salary structure under control, it isn’t capable of managing any other kinds of structures.
And this unseemly fondling of New Hampshire has got to stop. There are other ways to get cheap booze.
If I’ve held your interest this long, pay me the compliment of emailing your thoughts to email@example.com.