FREEPORT – The federal government is still trying to spend $787 billion for economic stimulus, but our politicians in Augusta think that Maine should duplicate the effort and want to borrow $108.3 million for that purpose in four debt proposals on the June ballot.

The borrowing will also cost taxpayers $26.8 million in interest expense over 10 years, in addition to the $74.2 million the state already owes to finance outstanding debt.

Like many of the state’s past borrowing proposals, the current four are a mix of the more-or-less defensible, the bad and the truly ugly, but because voters don’t have a line-item veto, they have to take or reject entire packages.

Question 2 on the ballot asks voter approval to borrow $26.5 million, $11 million of which is for a “Marine Wind Demonstration Site Fund” and related equipment that will “advance Maine’s energy independence from imported foreign oil.”

In spite of the hot-button language, the program won’t reduce the state’s need for oil by a single barrel.

Furthermore, the federal government is already providing billions of dollars of subsidies to renewable energy projects.

Asking Maine taxpayers for more money to force-feed development of the wind industry is piling on.

Question 3 asks for approval to borrow $47.8 million for a mix of transportation projects, including $24.8 million for “reconstruction and paving of state highways.”

As a stand-alone proposal, this would probably get a lot of votes from drivers. But it is combined with a request to borrow $16 million to expand the state’s growing investment in unused or unprofitable railroad track.

It would probably surprise most voters to know that the state already owns 320 miles of rail line, but only about 80 miles of it is actually in operation.

The state wants to use $7 million of new borrowing, plus another $7 million from the General Fund, to purchase 240 miles of unprofitable track that serves 22 widely spaced freight shippers in northern Maine.

If it bought the track, the state would also have to come up with at least another $9 million for needed repairs.

The state and a consultant argue that the line can be operated profitably in better economic times, but it is telling that no private rail operator has shown any interest in owning the line.

It is one thing to subsidize passenger rail, but the proposal to purchase limited-use track of questionable economic value is a textbook example of misguided industrial policy and corporate welfare.

The most egregious proposal is Question 4, which seeks to borrow $23.8 million (plus $5.9 million of related interest expense) “to provide capital investment to stimulate economic development and job creation by making investments under the Communities for Maine’s Future Program and in historic properties.”

In other words, the state wants the money for a large slush fund that it can use for a mish-mash of grants and loans for projects that voters and even legislators won’t know anything about until after the fact, made through an array of entities whose sole purpose is the distribution of tax dollars.

This grab-bag proposal is a classic example of the political mentality that treats taxpayers like a piggy-bank that can be drawn on to fund all manner of special-interest projects.

The result of the mindset and the policies it produces is a state budget that is under constant stress, with growing debt and higher taxes.

The underlying assumption is that big economic development projects and job creation will only take place if they are funded with tax dollars.

Spending advocates refuse to acknowledge that money taken from the private economy can’t be used by individuals for consumption, saving and investment, or by businesses to create sustainable jobs based on economic need rather than political preference.

They also fail to understand that neither states nor countries can borrow and spend their way to prosperity.

With the current crew in Augusta, voters are on their own to slow the state’s borrowing and spending binge.

A good place to start would be to reject the latest borrowing proposals (at least Questions 2, 3 and 4).

Then in November voters should consider sending individuals to Augusta and Washington who understand that the most successful economic development plan is one that allows taxpayers to keep more of their own money.

 

– Special to the Press Herald