Keeping the door open
For two years now, legislative leaders have talked about the need for a transportation bond, and transportation bond proposals remain active in Appropriations. Still the question is this: will they come to a consensus before session’s end?
By Kathryn Buxton
In late February, the Maine Legislature’s Joint Standing Committee on Appropriations and Financial Affairs heard public testimony on a number of proposed bond bills, including seven proposals for funding highways, bridges, rail and port infrastructure. Even before the hearing, there was ample discussion of the need for increased investment in the state’s transportation infrastructure from legislative leaders and members of the transportation community.
Well before this session began, leaders were vowing to make a bond package a priority. House Minority Leader Emily Cain (D-Orono) told the Bangor Daily News in October 2011 that Democrats in both houses were concerned about declining state investment in its aging infrastructure.
“When we look at the type of work that didn’t get done, it was primarily around investment in our infrastructure and our economy,” Cain said. At the end of the 2011 session, the MaineDOT two-year budget had taken a $220 million hit due to declining revenues. That funding gap was subsequently narrowed by approximately $104 million due to competitive construction bidding in the 2011 construction season and a more optimistic outlook on federal transportation. Still, with capital infrastructure spending reduced by more than $60 million this year, many are concerned about what effect rough roads and aging bridges will have on Maine’s long-term economic outlook.
At the time of Governor LePage’s State of the State address in January, other legislative leaders also were urging prudent infrastructure investments, including Senate President Kevin Raye (R-Washington County) and Senate Minority Leader Barry Hobbins (D-York County).
“There seems to be openness all around but we don’t want to go hog wild,” Raye told the Portland Press Herald in January of this year.
From 26 bills to 10
Among the 26 bills on which the Appropriations Committee heard testimony, there were seven transportation bonds. Those bills ranged widely from a $200 million bond proposal to pay for construction of a container port on Sears Island to three different rail bonds, to a $1 million proposal to fund road improvements in the town of Woodstock. Only 10 bond proposals currently remain in play. Of the 10, two are highway and bridge bills: L.D. 894, a $62 million General Fund bond introduced by Senator Diamond; and L.D. 1395, a $50 million proposal sponsored by Representative Richard Cebra (R-Naples). A third bill, L.D. 851, which calls for $25 million for commuter, freight and tourism rail infrastructure, also remains on the committee’s list of proposals still under consideration, as well as bond proposals for research and development, environmental, education and water/sewer infrastructure.
The committee will resume its debate after the state Revenue Forecasting Committee issues its outlook for the coming year and the Maine House and Senate finalize negotiations on the state budget. Those negotiations have been particularly challenging this year, given concerns over projected shortfalls at the Department of Health and Human Services.
Also crucial for a transportation bond to pass will be support from Governor LePage’s office. Whether there will be support remains an open question. The governor’s spokesperson, Adrienne Bennett, told the Associated Press last month that the governor is “not actively considering a bond package but ‘the door’s slightly ajar.’”
Representative Patrick Flood (R-Winthrop), co-chair of the legislature’s Appropriations Committee, noted that interests rates are low, and added the committee remains open to sending a carefully considered bond package to voters if leaders decide it is feasible.
“We haven’t closed the door,” said Flood. “We kept it open last year when we kept the 26 bills and now, with 10 still active, we’ve kept those bills alive awaiting direction from our legislative leaders.”
Representative Cain said her party continues to be in favor of sending a “targeted bond package” out the door to voters. “Democrats firmly believe public investment is critical for immediate job creation now and for long-term job growth in the future,” said Cain. “We support a targeted, responsible bond package that will create immediate construction jobs and set our state on the path for future economic growth. . . We must pass a bond package this session to help get our economy on track and help put more money in the pockets of working people.”
Making the case
Many in Maine believe that a bond package that includes capital transportation investments would be good for the state, as its economy continues to struggle through the recovery. During the Appropriations Committee hearings, legislators received testimony from individuals, businesses and organizations about the profound need for investment in Maine’s transportation system. Rob Kenerson of the Bangor Area Comprehensive Transportation System (BACTS) talked about the mounting need for repairs and reconstruction in his region that go back nearly two decades, a need that outstrips available funding.
“We have three significant corridors totaling over 3.5 miles needing significant reconstruction at an estimated cost of $12 to $14 million. One of these corridors does not meet the modern construction standards set in the 1950s,” said Kenerson. “The planning on this corridor began before I became the BACTS director 17 years ago. We have been able to construct one-half-mile pieces of this corridor every two to four years. We are not even halfway in reconstructing this corridor. The delays have been due to limited transportation funding.”
MBTA President Randy Mace spoke from personal experience on how the cuts have impacted the construction industry.
“We have struggled mightily these last few years, as demand for our products has fallen by over 60 percent during this period. Our work force today is half what it was five years ago and the remaining workers have experienced pay cuts in the 15-20 percent range. All of these realities of today’s construction environment have had a negative effect on the health of Maine’s economy,” said Mace. He also talked about how Maine lags other states in its General Fund contributions to highway and bridge repair.
“Maine is in a tough spot. On average, other states depend on their General Fund to the tune of 17 percent to fund highway and bridge improvements,” said Mace. “In Maine, there is no consistent General Fund participation in capital construction for roads and bridges.”
Leaving a bad impression
Many, including representatives from the tourism industry, talked about how their industries are negatively impacted by bad roads.
Rick Soules of John T. Cyr & Sons, the tour bus company, spoke about how bad roads leave a negative impression on tourists and impact their decision to visit again. “[Our] tour buses are very expensive and very comfortable, but a road saturated with potholes makes for an uncomfortable experience for the passenger. Suddenly, the scenic coastline or mountain views are forgotten and the bumps in the road are what are remembered,” said Soules.
His concerns were echoed by Carolyn Manson of the Maine Tourism Association: “Maine’s tourism market is primarily a ‘drive market,’ meaning the overwhelming majority of our visitors travel to Maine in their vehicles using our highway system to get to their destinations . . . They need and expect a well-maintained transportation system.”
What makes sense
Geoff Herman of the Maine Municipal Association urged legislators not to allow recent efforts to prioritize road repairs mask the crushing need for increased transportation investments in the state.
“Lowering the road improvement standard may help MaineDOT reduce the deficits it faces on paper and more fairly manage the funds it expends across the wide spectrum of roadways and bridges it is responsible for repairing, but at the end of the day the quality of Maine’s roadways will decline,” said Herman.
He also laid out a trifecta of facts that support transportation investments on the state level – unmet need, low interest rates and voter support.
“Municipal bond yields are at near historical lows. According to the Bond Buyer 20-Bond General Obligation Index, the current borrowing rates are at their lowest average in the last 40 years,” said Herman.
“By our count, since 1951 the state has sent to the voters 25 ‘general’ transportation bonds (i.e., those not including single site specific proposals) totaling $996 million. In that 60-year period, voters approved all but one, authorizing $973 million in investments on road and bridge projects.”
Some of the most compelling testimony came from Steve Whitcomb of H.O. Bouchard who appealed to legislators’ common sense.
“I am a very conservative Mainer. I am careful with borrowing money. I do not think it prudent to borrow money for something like gasoline that will be consumed in one day, but paid for over 30,” said Whitcomb.
“I do believe in borrowing as necessary to acquire and maintain long-term assets. Financing a car for four years that will last for 10, or financing a house for 30 years that will last for 100 is sound business. Financing a bridge with a 50-year lifespan makes sense. Letting it fall down does not.”
As the legislature heads into its final days and weeks, leaders on both sides of the aisle appear open to sending a transportation bond to voters.
“My personal feeling is there should be an infrastructure bond,” said Assistant Majority Leader Andre Cushing (R-Hampden). He noted that even in tough financial times, “we have an obligation to maintain our highways and bridges.”
For Cushing, it’s a matter of how much funding. He said that there remain several issues to be resolved as the Appropriations Committee and full legislature take up bonding – including the decision that “this is what we feel we can afford.”
Transportation advocates agree that many factors will play into the legislature’s final decision on bonding.
“We’ve heard from many behind the scenes that they are in favor of a transportation bond bill, and we are anxious to work with them,” said MBTA Executive Director Fuentes.
She noted that state debt levels are low, and Maine traditionally is very careful about the transportation borrowing it supports with funds dedicated to long-term investments in bridges, highway reconstruction and capital investments in port and rail infrastructure.