March 7, 2013

Democrats wag fingers at LePage for not releasing infrastructure bonds

House Republican leader says Democrats don't want to deal with state's hospital debt

By Steve Mistler smistler@pressherald.com
State House Bureau

AUGUSTA -- Democratic legislative leaders said Thursday that Gov. Paul LePage is holding the state's economic recovery hostage by refusing to release $104 million in bonds approved by voters.

Seth Goodall

Contributed photo

click image to enlarge

Kenneth Fredette

Staff photo by Joe Phelan

Voters approved three bond issues totaling $64 million in November, on top of another $40 million approved in 2010. The borrowing was intended for a host of transportation, conservation and water and sewer infrastructure projects.

LePage's signature is needed to issue the state general obligation bonds so the projects can move forward. However, the governor has refused to release the bonds, saying the state needs to improve its financial standing before he'll initiate the borrowing.

More recently, the governor has said he'll release the bonds if lawmakers pass his plan to pay off Maine's debt to hospitals.

Democratic leaders have said repeatedly the governor is holding infrastructure projects hostage until he gets what he wants. They attempted to strengthen their case Thursday.

Sen. Seth Goodall, D-Richmond, the Senate majority leader, said the governor's promise was effectively a "ransom note." Goodall referred to the governor's repeated statements that he'd veto legislation until lawmakers pass a complicated plan to repay Maine's hospitals.

Goodall said refusing to issue bonds is holding up infrastructure projects that would put Mainers back to work.

"He could do this (sign the bonds) today," said Goodall.

Assistant Senate Majority Leader Sen. Troy Jackson, D-Allagash, said LePage was disrespecting the will of Maine voters, while attempting to intimidate the Legislature. Jackson noted that it had been 796 days since the first bond package was approved by the Legislature and Maine voters.

"How many unemployment checks have gone out between then and now?" Jackson asked.

Jackson also referred to a video released by the LePage administration Wednesday during which Mainers were interviewed at a Manchester gas station about the governor's plan to pay back the state's hospitals.

Jackson said LePage should "take his camera" and ask Mainers if they wanted to get back to work.

The voter-approved bonds would fund a variety of projects, including $18.5 million for port-related projects, $9.5 million for education infrastructure, $29 million for research and development and $192.5 million for road and bridge upgrades.

The state constitution and statutes require a two-thirds vote of the Legislature to pass bonds and send them to voters. The state treasurer, who assesses the state's fiscal well-being, typically issues the bonds, but the governor must sign off on the borrowing.

Advocates for state borrowing cite record-low interest rates and the need for public investment to kick-start the economy.

The governor has shown that he is not averse to all bonds. He has proposed a revenue bond to pay off $186 million that the state owes Maine's hospitals in Medicaid reimbursements. He also has proposed another $100 million revenue bond to rebuild the Maine Correctional Center in Windham.

Revenue bonds are approved by the Legislature. The bonds championed by Democratic leaders Thursday are general obligation bonds.

LePage said settling the $186 million in state-owned debt should be a priority for lawmakers. On Wednesday, Democrats said the governor's plan needs further vetting. They said the bill violates a provision in the state constitution that says the state can't use bonds to pay off "current expenditures." Goodall said the bill has many other drafting errors.

In a statement issued on Thursday, however, House Republican leader Ken Fredette, R-Newport, charged that "the Democrats are just looking for a way to distract from the issue they really don't want to confront, which is the Governor's common-sense plan to pay off the state's debt to Maine hospitals."

"We've been here before," Fredette said. "The governor has already said that he'll issue these bonds, but we must pay our bills before taking on new debt. Credit-rating agencies and Maine families would agree that it's fiscally irresponsible to borrow more money without a plan to pay your bills."

Democrats counter that Maine historically carries a low debt load. In the late 1970s, the Legislature passed a law that caps outstanding debt at 7 percent of the General Fund. The debt load has historically remained at 5 percent.

According to data on the website of the state treasurer, the state's current debt, including interest payments, is $98.5 million. That represents a little more than 3.25 percent of overall spending.

In 2012, the tax-supported debt per Maine resident was $845, compared to a national median $1,117. According to Moody's Investor's Service, Maine's tax-supported debt is 2.3 percent of personal income. The national median is 2.8 percent.

Steve Mistler -- 620-7016

smistler@pressherald.com

Twitter: @stevemistler

Were you interviewed for this story? If so, please fill out our accuracy form

Send question/comment to the editors




Further Discussion

Here at OnlineSentinel.com we value our readers and are committed to growing our community by encouraging you to add to the discussion. To ensure conscientious dialogue we have implemented a strict no-bullying policy. To participate, you must follow our Terms of Use.

Questions about the article? Add them below and we’ll try to answer them or do a follow-up post as soon as we can. Technical problems? Email them to us with an exact description of the problem. Make sure to include:
  • Type of computer or mobile device your are using
  • Exact operating system and browser you are viewing the site on (TIP: You can easily determine your operating system here.)