Borrowing
money to
create jobs
The interest we can expect to pay, at current rates, on a $60 million bond package is $14,850,000.
The amount of federal dollars we can expect to leverage, at current reimbursement rates, on a $60 million bond package is up to $420 million.
Minus the principal sum, that’s a net gain of $405,150,000, significant earnings on our original investment.
The question to be presented to voters tomorrow, whether to borrow $60 million for research and development and housing projects, is tough. Maine is already seriously in debt, has flawed accounting practices and will be among the last states to ride the stimulus wave when the economy turns around.
The Baldacci administration is already doing what it can to absorb the debt and public scrutiny will demand that accounting practices be amended. The economic stimulus piece is dependent on job creation, which means we must invest in research and development at a level that attracts programs and people.
Approval of the referendum question won’t turn the economy around overnight, but it will infuse much-needed cash in markets hungry for growth.
For instance, if the bond is approved some of the funds will be directed to the Gulf of Maine Research Laboratory in Portland, formerly known as the Gulf of Maine Aquarium. This is not a place of dolphin shows and hands-on tidal pools. It is a place of serious research to tap the oceans for new medicines.
There are, according to researchers, 17 times more organisms in the ocean than on land and we have, to date, built the pharmaceutical industry on land-based organisms. The potential for medical cures in our oceans is tremendous and Maine is already a leader in that industry. It cannot continue to contribute without sufficient backing. The bond will help.
The bond will also help ongoing research at Maine’s public universities, including expanding facilities for expanded research and personnel.
Whatever fear we may have about borrowing this money, crossing our fingers that the investment is worth the return, is absolved by looking at Maine’s recent history.
Over the past three years, according to the Maine Biomedical Research Coalition, the Legislature has invested $24.65 million in the Maine Biomedical Research Fund. Laboratories have used this base funding to leverage an additional $168 million from the federal government and private grants.
That’s just one fund, but it’s clear R&D investment is economic development.
The bond funds we are asked to approve will be invested in Maine, in people and in local businesses. The money will also give Maine a chance to carve a greater niche in the research world, attracting more enterprise.
If, as private investors, we could spend $100, pay minimal interest and earn $700 in return, there would be no question but to proceed. The numbers in the referendum may be bigger, but the sound return is the same.
A vote to support the bond package is a solid expression of support for Maine.
jmeyer@sunjournal.com
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