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My first 2-year term as State Treasurer ends in January. I hope to have the opportunity to serve the people of Maine for another two years. In the meantime, my Treasury work will include several initiatives dealing with government spending, borrowing and debt, and their impact on our state economy and jobs. I’ll also continue to keep you informed as to how Maine state government spends your hard-earned tax dollars. Please share my Treasurer’s Blog with family, friends and co-workers, and click here to sign-up to receive them. Call Treasury at 624-7477 to schedule a time for me to speak to your group about Maine’s fiscal issues.
As State Treasurer, my job does not include commenting on political advertisements. However, it does require that I defend and help enhance Maine state government’s vitally important credit rating. Ensuring that all information about our credit rating is reported accurately protects the integrity of the data for those considering investing in our Great State. That, in turn, strengthens our state economy and provides more private sector jobs for our fellow Mainers. More tax revenues are generated, allowing state government to help educate our kids, pave the roads, and care for the most vulnerable among us. Maine’s credit rating is serious stuff.
That’s why I was surprised and disappointed to read about a misleading political TV advertisement in the September 9 issue of the Maine Sunday Telegram that references our State’s credit rating. The Truth Test article “King Ad Right on Tax Decrease, Dubious on Bond Rating” analyzes the TV ad by one of the candidates for Maine’s open United States Senate seat.
Our credit rating is a visible sign of Maine’s economic and fiscal health. The rating weighs the state tax burden on businesses and families; government spending; public debt; energy and health care costs; the regulatory environment for companies; demographic data; and other relevant information. A higher credit rating indicates a higher likelihood that enough tax revenues will be generated by the Maine economy to pay for state government programs and services, and to pay the interest and principal to investors who loaned us money by purchasing our “general obligation” bonds. A lower credit rating points to a lower confidence level that enough tax revenues will be generated to cover those state government expenses.
Economic research firms, publications, and media outlets regularly rank states according to their credit ratings. Entrepreneurs use these objective measurements to help assess state business climates in deciding where to start/expand their companies, and to create jobs. Investors rely on credit reports to help identify the most secure and promising state bonds to buy, thereby lending money to those state governments to build roads, bridges, and other infrastructure projects. A state’s credit rating is important business. All information relating to it should always be disclosed accurately and truthfully.
The political TV ad that I read about in the Maine Sunday Telegram includes the troubling language “As Governor, he … got the highest bond rating ever.” That didn’t sound right given my understanding of Maine state government’s financial history. I dusted off piles of credit reports at State Treasury, and cross-checked the information with that maintained by the Legislature’s Office of Fiscal and Program Review. Unfortunately, the TV advertisement is not accurate.
Maine state government earned “the highest bond rating ever” of AAA during 1978-91 by Standard and Poor’s, one of three national credit rating agencies. It achieved the same top distinction of Aaa from 1944-74 by Moody’s, a second rating agency. Maine has never been awarded the AAA score by Fitch, the third agency. Unlike the claim in the political TV ad, our State’s credit rating never reached the highest level by any rating agency during 1994-2002.
Any public reference to Maine’s credit rating is serious business, especially if authored by a current or former state government official. As State Treasurer, it’s my responsibility to make every effort to help assure the accuracy and truthfulness of this information in the public realm, and to set the record straight when necessary. As a result, I strongly recommend that the contents of the aforementioned political TV ad be corrected as soon as possible.
Maine state government’s credit rating is a visible economic and fiscal benchmark. Entrepreneurs and investors regularly use it to help decide where they should invest their money and create jobs. They must be able to trust our public data. Otherwise, their capital and jobs will go elsewhere. Misleading or incorrect credit rating information hurts the hard-working people of Maine. Let’s be diligent about always getting the facts right.
Maine State Treasurer
(Mr. Poliquin's comments are as State Treasurer, not as a Trustee of the Maine Public Employees Retirement System.)
For related information and media, visit www.maine.gov/treasurer/outreach.