Taking a toll | Borrowing money to fund essential infrastructure repairs lets politicians off the hook
Maine may have enjoyed a light winter this year, but you wouldn’t know it from the condition of the state’s roads. According to a recent study by transportation research group TRIP, 32% of Maine’s roads are in “poor or mediocre condition” and 34% of Maine’s bridges are “structurally deficient or functionally obsolete.”
The deplorable condition of Maine’s roads and bridges is due in no small part to declining state investment in construction and maintenance. Simply put, the state is not devoting nearly enough of its vast resources to repairing and upgrading Maine’s transportation infrastructure.
Consider the following.
In 1960, total spending by state government was a little more than $141 million, which is the equivalent of about $1 billion in today’s inflation-battered dollars. Of that, Highway Fund spending was about $60 million. In other words, $4 out of every $10 spent by Augusta back in 1960 funded roads and bridges.
Zip ahead 50 years and by 2009, total state spending by Augusta had shot up to a staggering $4.7 billion. Highway Fund spending, though, was only $307 million in 2009, making up only 6% of total state spending.
The $60 million the state spent in 1960 would be worth $430 million in today’s dollars. Even though there are tens of thousands of additional cars and trucks on Maine’s roads today, the state budgets the equivalent of $100 million less to fix our roads now than it did 50 years ago.
Borrowing costs
Why is it that despite endless complaints about the condition of Maine’s roads, policymakers no longer see transportation as a top priority in the state budget? For one thing, Maine voters seem to have no problem with borrowing to meet these needs though transportation bonds.
Every year, it seems, the politicians in Augusta put a transportation bond in front of voters along with the promise that Maine’s roads will finally get the work they need. Just last fall, voters overwhelmingly approved a $71 million borrowing package that included funding for highways and bridges.
Why should politicians make transportation funding a budget priority if Maine voters are happy to borrow the money instead? This allows politicians to spend state tax dollars on pet projects that satisfy special interests rather than tackling Maine’s crumbling roads and highways.
But taking on more public debt, even to fix Maine’s deplorable roads, is not the solution. As The Maine Heritage Policy Center recently revealed in a new study, Maine’s total state debt amounts to an astonishing $11.5 billion, including unfunded state retiree obligations, voter-approved bonds and other taxpayer-backed debt. According to a recent New York Times article, when that enormous sum is calculated as a percent of the state’s gross domestic product, it puts Maine among the most heavily indebted states in the nation.
Worse still, voters have approved just a fraction of that debt. Only $650 million or so of the state’s $11.5 billion in debt was ever put in front of voters for their approval. The rest is made up of either unfunded liabilities for retiree pensions and health care, or debt that was acquired through state entities such as the Maine Governmental Facilities Authority.
Indeed, Maine’s state government has become addicted to debt. The total debt accumulated just by the Governmental Facilities Authority, which assists state government in financing the construction and equipping of its facilities, has risen from $19.5 million 1998 to more than $200 million in 2008. Voters never approved one penny of this borrowing.
Back on the table
Astonishingly, even this mountain of debt is not enough to satisfy the politicians in Augusta. When voters go to the polls in June and November, they’ll be asked to approve a total of $75 million in new borrowing, an amount that could increase by another $99 million if House Speaker Hannah Pingree and Senate President Libby Mitchell get their way.
Borrowed money, of course, is not free. Maine’s debt burden has grown so large, the state is budgeted to spend well over $120 million next year in interest payments to service its debt. That money is not available for health care, education or to fix Maine’s roads and bridges.
The time has come to end state government’s love affair with debt. Voters should vote against the borrowing packages on the ballot this year. The public then has to demand that transportation funding become, once again, a budget priority in Augusta. Today, the Highway Fund budget is set by the Legislature’s transportation committee, while the appropriations committee deals with the state’s General Fund budget. The time has come to combine the two funds and have one committee review the entire state budget. That way, Maine voters can be sure that the repair of their roads and bridges has a place at the budget table.
With government debt spiraling out of control at both the state and federal level, it’s time to say no to new debt and to say yes to making prudent, long overdue investments in Maine’s transportation infrastructure.
Stephen Bowen, a former legislator and member of the Joint Standing Committee on Appropriations and Financial Affairs, is a fiscal policy analyst and director of the Center for Education Excellence for The Maine Heritage Policy Center. He can be reached at sbowen@mainepolicy.org.
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