Today is Election Day in Maine. Voters from Kennebunkport to Caribou are probably busy trying to figure out the details of a complicated tax reform package on today's ballot. But it is important for voters not to forget about four bond questions also under consideration today, which have huge implications for the state's long-term fiscal health.
Questions 2,3,4, and 5 authorize the issuance of $108 million in bonds to pay for highway construction, water treatment, weatherization, and other public works projects. But authorizing these bonds and adding to the public debt does not make much sense when you consider that the state already owes $11.5 billion, according to the Maine Heritage Policy Center (MHPC). Additionally, many of the state's liabilities, including pensions and retiree healthcare, are underfunded by nearly $5.1 billion. What's worse, according to MHPC's J. Scott Moody, the unfunded liabilities are likely much worse due to the use of high discount rates in the actuarial analysis. A lower, more realistic discount rate increases the size of the state's pension liabilities to nearly 50% of GDP, the eighth highest in the country. As Moody rightly points out, the only options that will be available to Main policymakers going forward will be to cut benefits or raise taxes. Since the politicians in Augusta, like those in state capitols across the country, have not demonstrated an appetite for serious cuts in their budgets, tax increases are more likely than not the option they will pursue.
Adding more debt by approving these bonds will make a bad fiscal future for Maine much worse. Let's hope that Mainers from across the state speak out against this reckless borrowing and demand that politicians in Augusta tackle unfunded liabilities first by voting NO on Questions 2,3,4, and 5 today.