In a time of little or no economic growth, increasing job loss and government budget shortfalls, state borrowing to encourage economic growth can be a difficult idea to sell. But it is exactly what Maine should be doing to grow out of its current slump, and the $60 million package approved last week by the Legislature is a good start in that direction.
The money would go toward biomedical research ($20 million), R&D within the state university system and elsewhere ($17 million), affordable housing ($8 million) and municipalities ($6 million). Money would also go toward marine research, agriculture and applied technology development centers around the state. The total seemed large to some lawmakers, who complained about the size of the bond package, but the package is, if anything, too modest, and is not near the top levels of bond requests in recent years.
It is, however, an important collection of priorities that was helped out by the bipartisan support it received in the Legislature. The short history of funding biomedical research, for instance, is instructive. During the last couple of years, Maine has invested nearly $25 million in facilities such as The Jackson Laboratory, MDI Biological Lab and the University of New England. In return, they have won grants worth an additional $168 million, with the large majority of that money staying in state, paying for building improvements, new jobs and local supplies. This spending has generated nearly $9 million in just one year in taxes, returning to government coffers more than was borrowed.
The R&D effort at the university can tell much the same story. By being able to match federal grant money, build facilities that attract top researchers and provide support for new areas of research, the system builds an economy while educating Maine students. And equally important, it provides stable careers for a wide range of people, from residents looking for new jobs as manufacturing departs to college graduates who would like to stay in Maine and raise a family here to world-class scientists who arrive needing their own staffs to operate their labs.
The money for affordable housing is clear enough to anyone in southern Maine, and while part of the housing crunch there would disappear if northern Maine had a stronger economy, the bond is a near-term necessity to help struggling families live where the work is. Collectively, the bonds serve different purposes but have the common benefit of being put to use immediately to create jobs quickly and strengthen the economy over the long term. The return to the state in taxes generated by this activity more than pays for the debt service.
Putting the money to work quickly explains why some lawmakers were eager to have the public vote on this bond in June. The spring vote on these investments, however, also allows Augusta to consider a second round of bonds in the November election. A transportation bond already is scheduled for the fall, as is one for education. But with interest rates at record lows, the state well under its borrowing limit and plenty of catching up to do with other states, the Legislature should consider a second economic package to expand on the first.
This is a critical time for Maine and no time to be timid in making investments that will build a stronger economy that can be sustained for years to come.