March 23, 2013

Upfront fee urged for Maine state liquor deal

Democrat Seth Goodall says his bill is the best way to repay hospitals.

By Jessica Hall jhall@pressherald.com
Staff Writer

AUGUSTA — Senate Majority Leader Seth Goodall, D-Richmond, touted Friday the benefits of a bill he sponsored to repay debt owed the state's hospitals using an upfront fee tied to the state liquor contract.

click image to enlarge

A Crown Royal display at the Bow Street Market in Freeport. Senate Majority Leader Seth Goodall, D-Richmond, touted Friday the benefits of a bill he sponsored to repay debt owed the state's hospitals using an upfront fee tied to the state liquor contract.

Gordon Chibroski / Staff Photographer

At a work session before the Veterans and Legal Affairs Committee, Goodall said an opposing bill from Gov. Paul Le- Page raises too many questions about the cost and risks to the state. LePage's measure, L.D. 239, would pay an annual fee to an outside vendor to run state liquor operations for 10 years.

Goodall suggested his proposal, L.D. 644, which would require an upfront payment of $200 million or payments in installments, would give a potential vendor more incentive to run the business well.

"When someone puts their costs on the line, they are incentivized to run the business as best they can," Goodall said. "There are millions of dollars at stake."

Both proposals would tie the liquor contract to the repayment of debt to state hospitals. Maine's 39 hospitals are owed $484 million in overdue Medicaid reimbursements.

Sen. Garrett Mason, R-Lisbon Falls, spoke against the upfront fee, saying a vendor would charge for the cost of financing that money.

"I am absolutely against an upfront payment. I think we will lose a lot of money," Mason said.

Despite the differences in the proposed bills, Goodall suggested that there could be some agreement reached on some aspects of the request for proposal for a new liquor vendor. 

"I see a meeting of the minds very quickly on the RFP and the RFP process," Goodall said. "Does this committee want to keep this business entirely in the private sector or have a hybrid approach? You need to dive in and look at what specifics should be in the law.

"Move all the sections into one bill, and look at the value of money as well as the cost of a revenue bond."

The next work sessions on the liquor bill will be held Wednesday and Friday.

Staff Writer Jessica Hall can be reached at 791-6316 or at:

jhall@mainetoday.com

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