3 min read

Republican gubernatorial hopeful Bobby Charles recently blasted Gov. Janet Mills for “reckless spending and higher taxes” that he falsely claimed have created a $450 million deficit.

The state actually ended its fiscal year with a surplus of $152 million.

The story of the state’s budgetary success is easily lost as lies are tossed around on the campaign trail. But it shouldn’t be.

Fitch Ratings this month upgraded the state’s bond rating to reflect that Maine’s government has shown “sustained improvement in its operating performance” despite “a challenging budget cycle” and an aging population.

It said Mills’ administration has “strong budget controls and discipline, and a low long-term liability burden that has declined over time” as well as “dedicated operating reserves at historically high levels.”

Bolstered by a rainy day fund that exceeds $1 billion, the state has the resources to withstand rocky periods ahead.

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A rating is akin to a report card that shows the financial health and economic viability of the entity reviewed. It’s not always on the mark, but it generally provides an accurate snapshot of the organization’s current and future prospects.

What’s especially helpful about it in government terms is that bond rating agencies don’t care much about politics. They care about how well a state, city or agency is caring for the public’s money.

Upgrades in bond ratings, then, are seriously good news.

Mills pegged it when she said that “this significant ratings upgrade from Fitch, a well-respected global credit ratings agency, combined with our healthy reserves, shows the strength of the state’s financial picture.”

For Republicans like House Minority Leader Billy Bob Faulkingham of Winter Harbor, a healthy reserve and solid finances are signs of too-high taxes rather than a sign of good fiscal oversight.

But socking money away has a direct impact on taxes, too, and ensures future stability at the same time.

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In its most basic terms, higher bond ratings lead to lower interest rates when Maine  borrows money, which it does frequently for a wide range of projects. That means more money for taxpayers and less money for those who buy bonds.

Bond ratings also offer insight into the often mysterious world of government finance. They are rare examples of independent experts looking at budgets and financial reports to determine how soundly a government is operating.

The big ratings firms — Moody’s, S&P Global Ratings and Fitch — ultimately stand or fall on how well they assess what’s going on among the firms and governments that sell bonds. Buyers, after all, expect a fair, honest, thorough review so they know how risky it is to invest in particular bond sales.

That Maine’s bond ratings are going up is as clear a sign of good stewardship of the state as one can find.

It doesn’t mean that state leaders couldn’t do better on any number of issues, from getting more houses built to lowering electricity bills, but it is an indication they are good stewards of the state’s finances.

Fitch stated that it expects Maine’s revenues to grow alongside inflation. The state also has the ability, the firm noted, to raise more money by broadening its tax base, levying new taxes and fees and adjusting tax rates and brackets.

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Holding Maine back from the highest possible bond rating is a long-term problem we need to address: not enough young people.

“Maine’s economic growth prospects are below the U.S. state average,” Fitch stated, because it has the oldest population in the country.

“Demographic pressures limit economic growth,” the firm pointed out.

It’s a tough issue to address but ought to be near the top of Maine’s agenda.

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Steve Collins became an opinion columnist for the Maine Trust for Local News in April of 2025. A journalist since 1987, Steve has worked for daily newspapers in New York, Connecticut and Maine and served...

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