Thursday, April 24, 2014
AUGUSTA -- Gov. John Baldacci proposed a $79 million borrowing package Wednesday he said would create nearly 2,000 jobs.
MAKING THEIR CASE: Gov. John Baldacci, left, listens as David Cole, commissioner of the Maine Department of Transportation, answers a question during a news conference Wednesday morning at the governor's State House office in Augusta. Baldacci proposed a $79 million borrowing package that he said will create nearly 2,000 jobs.
The package includes $62 million for highway, port and rail projects and $17 million for environmental and energy needs.
"This is not a laundry list of ideas," Baldacci said during the announcement in his office. "Instead, it's focused on investments to build Maine's economic capacity into the future while creating jobs today."
Maine voters will already consider three bond issues on the June ballot related to economic development, energy efficiency and water and waste-water improvements. If approved by lawmakers, a transportation question would also be added. Other questions would be rewritten to reflect the new projects, Baldacci said.
His announcement comes a week after Democrats in the Legislature proposed a $99 million bond package. Both proposals will now go to the Appropriations Committee for consideration.
Sen. Richard Rosen, R-Bucksport, a member of the Appropriations Committee, said he thought bond negotiations were completed last year when lawmakers agreed on a $150 million package to be voted on in three installments.
At the time, Republicans would not go higher than $150 million because they felt it was a responsible level for the entire two-year budget cycle, he said.
"I thought we had a negotiated agreement for the biennium," he said. "I have to admit, to me, it feels like Democratic gubernatorial primary politics at play."
Nevertheless, Rosen said if Democrats can prove that there is money to pay for additional debt, he would take a closer look at the contents of the proposals -- particularly money for transportation needs.
Baldacci, who set aside money in the budget to begin paying back the bonds, vowed to work with Republicans to put together a plan.
No bonds will move forward without Republican support, because bonds require a two-thirds vote in the House and Senate.
"I'm going to build bipartisan support," Baldacci said Wednesday.
The Baldacci proposal and one put forward by majority Democrats have some similarities.
Both propose to spend $17 million to $20 million to purchase and maintain the Montreal, Maine & Atlantic Railway, which has more than 200 miles of track in Aroostook County. The company has informed the federal government it plans to abandon the railroad, possibly as soon as this summer.
Both plans also propose to spend $5 million for passenger rail in Lewiston-Auburn and $5 million to $7 million on water and waste-water projects.
One new project in the Baldacci proposal is $8 million for the Ocean Gateway Deep Water Pier in Portland. The money would pay for a deep water cruise ship berth.
"When you talk about the megaberth in Portland, it's going to be critical because they tell me they have the opportunity to triple the number of cruise ships coming in," Baldacci said. "You're talking about tourism and economic development streaming into Maine."
In the area of transportation, the proposal calls for $28 million for highway projects, which is estimated to support 750 construction jobs. The money would pay for about 14 miles of highway reconstruction and 31 miles of capital paving across the state, according to the governor's office.
Maine Department of Transportation Commissioner David Cole said the state has spent all of its federal stimulus money for transportation, so it is looking to take on new projects this summer.
"These are all bread-and-butter projects," he said. "They stand on their own. They have the added benefit of creating jobs now."
The state has about $507 million in outstanding general obligation bonds and $140 million in bonds approved by voters but not yet borrowed upon, according to the state Treasurer's Office.
Standard & Poor's rates Maine bonds "AA," which implies "very strong capacity to meet financial commitments," according to the company.
Ryan Low, commissioner of the state Department of Administrative and Financial Services, said Maine pays off its bonds in 10 years -- a more aggressive payback schedule, he said, than most other states. In the 2012-13 budget, the state will retire $150 million worth of debt, he said.
Baldacci said the state needs to be ready to move forward.
"I know some people are concerned about borrowing, but we can't sit around and hope and wait for the economy to improve," Baldacci said. "We've got to be doing our part. These projects are sorely needed."
Senate Minority Leader Kevin Raye, R-Perry, said the governor's proposal, while still less expensive than what legislative Democrats proposed, concerns Republicans.
"I think it's still too large," Raye said. "It's a step in the right direction. There's significant concern among Republicans in the Legislature about our capacity for borrowing."
Susan Cover -- 620-7015