October 29, 2013

Large Maine transportation bond has history on its side

It has a hefty $100 million price tag, but Mainers have a record of approving money for transportation.

By Eric Russell erussell@pressherald.com
Staff Writer

For the seventh time in a decade, Maine voters will be asked to approve a transportation bond package that would fund road and bridge maintenance as well as various marine, port, rail and aviation projects.

BALLOT QUESTION 3

Although the bond does not earmark money for specific projects, here is a general breakdown of where the funds would go:

$44 million to the Maine Department of Transportation for priority highway projects.

$5 million for the DOT’s Secondary Road Program Fund, which provides funds to communities that match 50 percent of the cost of the project.

$27 million to the DOT to replace or rehabilitate existing bridges.

$24 million for to-be-determined multimodal projects, including rail, harbors, aviation, marine transportation and mass transit, as well as to acquire property and make improvements at the International Marine Terminal in Portland.

The total estimated lifetime cost of the bond is $122 million, which assumes 4 percent interest over 10 years.

Question 3, the largest of five bond questions on next week’s ballot, asks voters to approve or reject $100 million in borrowing that would leverage an estimated $154 million in federal and state funds.

The bulk of that borrowed money, $76 million, would go directly to the Maine Department of Transportation for priority road and bridge projects.

The rest would fund to-be-determined multimodal projects, including the acquisition of property and capital improvements at the International Marine Terminal in Portland – specifically, to extend rail service directly to the terminal to serve Eimskip, an Icelandic company that moved its shipping hub to Portland earlier this year.

The bond question grew out of a bill drafted this summer by Gov. Paul LePage. Although Republicans and Democrats in the Legislature wrestled a bit over bonds and how to handle them, lawmakers were united in their support for a transportation-specific bond.

“The money can only go to long-term capital projects. You’re talking about bridges that might last 40 to 50 years, or for new bridges, 80 to 100 years,” said Maria Fuentes, executive director of the Maine Better Transportation Association, an Augusta lobbying group. “With roads, it’s the same thing. We can’t use bond money just to patch up a road, so we think this bond is very responsible.”

In the last few years, there has been growing unease among some voters about borrowing at the state and federal levels.

History, however, suggests that Question 3 is likely to pass easily as the last time a transportation bond failed to pass in Maine was 1969.

Available data shows that voters have approved 16 transportation bond referendums dating back to 1987, with half of those receiving more than 70 percent support.

In 2012, voters were asked to approve or reject a $51 million transportation bond for roads and bridges. It was overwhelmingly approved by 69 percent of those who voted. There are no political action committees formed either in support of or opposition to Question 3.

Rep. Wayne Parry, R-Arundel, the ranking Republican on the Legislature’s Transportation Committee, said bonding has become an annual or biennial necessity.

“I would rather have direct funds from the General Fund, but I don’t mind borrowing as much as long as it’s for projects that are going to last,” he said.

Rep. Ann Peoples, D-Westbrook, also a member of the Transportation Committee, said transportation bonds are not only a good investment, they are one of the only viable options to fund road and bridge maintenance.

“It’s not a bad time to be borrowing money,” Peoples said. “And construction people are hungry. They want the work.”

Approximately two-thirds of the Maine DOT’s budget is paid for with fuel taxes. However, with people buying less gas because of economic factors and more fuel-efficient cars, the tax revenue has decreased. The demand for road work, however, stays the same.

Maine’s gas tax revenue increased steadily from 2003 through 2010, but it has dipped since and is expected to continue dropping, according to projections by the Maine Revenue Forecasting Committee, especially since the Republican-controlled Legislature passed a bill in 2011 that stopped indexing of the state gas tax to adjust for inflation. The federal gas tax has not increased in 20 years.

“So the message is: We’ll give you the same amount of money, but we expect you to do more with it,” Fuentes said.

The other option for raising revenue is tolls. Currently, the only tolls in Maine are on the Maine Turnpike, which is run by the Maine Turnpike Authority, a quasi-state agency that operates separately from the Maine DOT. Every so often, there is an outcry to establish tolls on Interstate 295, but that would require federal approval since it was built with federal dollars. There is no interest in Washington, D.C., to create new tolls.

Question 3 has the support of the Mayors Coalition, which represents Maine’s biggest cities. The group is holding a press conference Tuesday in Augusta to encourage Mainers to support all five of the bond referendums on the Nov. 5 ballot. The Portland Regional Chamber also supports all of the bond referendums, including Question 3.

Some priority projects in Greater Portland include rebuilding a stretch of busy U.S. Route 302 in Bridgton; ramp and intersection improvements at Forest Avenue and Interstate 295; improvements to Woodfords Corner in Portland, a perennial traffic headache; and building a bike and pedestrian pathway on Main Street in South Portland.

Fuentes said she thinks the state’s investment in multimodal projects, such as the International Marine Terminal, has produced a good return.

One example was the state’s 2010 purchase of 233 miles of railroad in northern Maine from Montreal Maine & Atlantic Railway, which had threatened to abandon the line. The state bought the tracks for $20.1 million – more than $11 million of that from bonds. The state has been leasing the tracks ever since to Irving Oil, which hauls crude oil from Montreal to its refinery in New Brunswick.

Eric Russell can be contacted at 791-6344 or at:

erussell@pressherald.com

Twitter: @PPHEricRussell

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