“LD 1816, with its emphasis on transportation and other critical infrastructure projects, could create approximately 2,415 jobs,” MECEP Fiscal Policy Analyst Dan Coyne said in testimony prepared for delivery at a Committee hearing this afternoon. “A successful bond package would create jobs now and encourage new public and private investments that can serve as the foundation of future prosperity. Now is the time for an appropriate amount of state government investment to help fuel Maine’s economy and create and preserve thousands of much needed jobs.”
MECEP based it projections on the Regional Input-Output Multipliers (RIMS II) used by the U.S. Department of Commerce, Bureau of Economic Analysis to estimate the number of jobs public investment can be expected to generate. Under the RIMS II formula, for every $1 million spent in construction, there will be 23 jobs created throughout the Maine economy. MECEP also emphasized that the proposed bond package is well within long-accepted state bonded indebtedness guidelines.
“Even with adoption of this bond package, the FY 2010 debt service ratio of general obligation debt as a percentage of general fund, highway fund, and revenue share revenues would be 3.52 percent,” Coyne adds. “The ratio in FY 2011 would be 3.72 percent. Both these numbers are well below the long-established 5 percent threshold.”
MECEP praised actions the Legislature has taken to strengthen Maine’s credit standing.
“MECEP strongly supports the steps that the Legislature’s Appropriations Committee has taken to address concerns Standard & Poor’s recently raised about Maine’s credit rating,” Coyne added. “The fact remains that now is the time to authorize timely and targeted investment.”