April 18, 2024
BANGOR DAILY NEWS (BANGOR, MAINE

Public works program pondered

PORTLAND — Policymakers in Maine are suggesting that the state step up its borrowing to finance a massive public works program that could help ease the recession.

Despite last month’s vote in which six of seven bond issues on the state referendum ballot were rejected, some key officials say that work on roads, sewers and buildings is one of the few things the state can do to bolster the economy.

Supporters of such an effort cite its broad impact, noting that every 100 construction jobs gives rise to an additional 60 jobs elsewhere.

The concept will be considered by the Maine Jobs Commission, a 13-member bipartisan panel that is scheduled to present to the Legislature next month its proposals for creating jobs.

“I think this is a very credible strategy,” said Dana Connors, commissioner of the state Transportation Department and chairman of the jobs commission. “Public works projects are important to economic recovery.”

But McKernan aide Richard Silkman, the state planning director, says a jobs bond is doomed to failure unless it’s accompanied by changes in the state’s costly Workers’ Compensation and regulatory systems.

“Any pump-priming,” Silkman said, “or attempt to stimulate the economy by borrowing, is going to have to be tied to fundamental reforms of the things that make business in Maine less competitive.”

The use of debt to create public works jobs was a cornerstone of Franklin D. Roosevelt’s efforts to lift the nation out of the Great Depression during the 1930s.

“I think there are a lot of similarities between 1991 and 1931,” says Senate President Charles Pray. “I think we should come back with an economic development bond issue and bring it out for the June primary.”

Supporters of public works bonds say Maine stands to benefit from low interest rates when it borrows money and is in a position to negotiate favorable prices from construction firms which are highly competitive during a recession.

Officials agree that any pump-priming measures would have to be carried out swiftly to have any impact on the recession. Supporters want to avoid projects that could face lengthy delays while they make their way through the regulatory process.

Connors says he would steer clear of highway widening or construction projects that could prove contentious.

“The department will try to do projects that have a maximum benefit in terms of jobs, but have a minimum of process to them,” he said. “We want projects that don’t need a lot of time to get a permit, a lengthy design or controversial situations.”

Passage of a jobs bond would require a strong, bipartisan educational effort, says Charles Colgan, associate professor of public policy at the University of Southern Maine.

Colgan, a former state economist, says voters must be assured that the borrowing costs would be offset by tax revenue created by worker spending.

“The only way it can happen,” says Colgan, “is if the governor, the Legislature and the business community say, `This is a good idea. We can afford it. Here are the reasons you need to vote for it.’ If people perceive that everyone agrees this is a good idea, it has a chance.”


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