Thursday, June 20, 2013
As state treasurer, my job does not include commenting about political advertisements. It does require, however, 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 Sept. 9 issue of the newspaper that references our state's credit rating. The Truth Test article, "Little detail, lots of truth in King ad" analyzes the TV ad by Angus King, one of the candidates for Maine's open U.S. 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 the Maine economy will generate enough tax revenues 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 or 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 Sunday newspaper 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, I found that 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, while King served as Maine's governor.
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.
Misleading or incorrect credit rating information hurts the hard-working people of Maine.
Let's be diligent about always getting the facts right.
Bruce Poliquin is treasurer of the state of Maine.