You may be annoyed when you learn about the little “trick” that is carefully hidden in the state’s bureaucratic bag of “treats.” Before I tell you about this sleight of hand, let me provide some background information.
As you probably know, bonding is the state’s way of borrowing money to fund projects that are not included in the annual two-year budget. If approved, the bonds are sold and then the state pays the money back, plus interest, through a predetermined number of years, usually 10 or 20, similar to paying home mortgages.
Technically these bonds are called General Obligation Bonds and before being sent to the voters for final approval, they must first be endorsed by the governor and by at least a two-thirds vote of the Legislature.
General Obligation Bonds are backed by the full faith and credit of the state of Maine, and the money from the sale of these bonds is used to improve the state’s infrastructure, such as repairing roads and bridges, constructing and making improvements to buildings within the university and community college systems and much more. They are also used for environmental improvements such as cleaning up toxic dumps and creating clean water supply systems.
Bonds are usually placed on the ballot on Election Day in November each year giving residents ample opportunity to research and become familiar with the details of each bond prior to the vote. Often, various interest groups will provide information either in favor or in opposition to specific bonds, which is also helpful to the voters as they become more informed.
The entire process, as designed by the Maine Constitution, is open and transparent, involving the governor, the Legislature and the citizens, who make the final decision on whether to approve the bonds and the accompanying debt.
Therefore, in order for the state to borrow millions of dollars through bonding, the Maine Constitution makes sure the voters are not only aware of the borrowing, but must also give their approval.
Now let’s peek into that ominous bag of treats and pull out, for your viewing pleasure, that little “trick” I mentioned.
Within state government there is an agency called the Maine Government Facilities Authority that was created in 1987 and redesigned in 1997, as stated in its annual report: “To issue bonds for the purpose of providing funds to acquire real or personal property, financing or refinancing projects and lease property back to the Judicial, Legislative, or Executive branches of the State of Maine.”
Hmmm. That sounds like the bureaucratic definition of something very important, but you know there is more to this than meets the eye. What does it really mean? It means that state government can borrow millions of dollars through bonding, but without the knowledge and approval of the citizens of our state. That’s right. This unique and little-known agency was created so the state can omit the voter approval step and simply have the governor and the Legislature approve the borrowing for their favorite projects.
According to the Maine State Treasurer’s office, as of June 30, 2013 the Maine Government Facilities Authority has a current borrowing debt of nearly $200 million. That’s a $200 million obligation that the taxpayers are responsible to pay, but had no idea they had even borrowed it.
Now why on earth would the state want to avoid the voter approval step? The answer is a little unnerving, so as the famous dentist and gunfighter, Doc Holliday, said when he was about to win his 12th poker hand in a row, “Cover your ears, darling.”
By removing the annoying voter-approval requirement, the chance of the bond being defeated by those pesky voters is eliminated leaving the borrowing idea du jour safely secure in the arms of the government. And, by removing the voters from the approval process, the time-consuming explanations and discussions about each bond is also eliminated. After all, isn’t that a much more efficient system?
You’re probably wondering what type of project bureaucrats like to include in this more “efficient” borrowing technique. Here’s one that will catch your eye.
The Department of Corrections is proposing to build a new prison in Windham, carefully explaining that the current facility is out of date. The estimated cost of this new Windham prison is $100 million. How will they get $100 million? Borrow it through bonds.
The department fully understands that the voters might not be too cozy with the idea of spending $100 million on a new prison given the needs in other areas, like repairing schools, etc. So how can they get their new prison without involving those troublesome voters? Enter the Maine Government Facilities Authority. Presto! No voter approval necessary!
See how easy that is. It’s kind of like “trick or treat,” only in this scenario the trick is played first, then comes that big treat. Tricky.
Bill Diamond of Windham served as District 12’s senator from 2004-2012, and is also a former Maine secretary of state.
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