AUGUSTA, Maine — The upheaval in the world’s financial markets that tightened credit is not expected to have an impact on the $3.4 million clean-water bond issue on Maine’s Nov. 4 ballot, state Treasurer David Lemoine said Monday.
The borrowing package, which is relatively small compared to those Maine voters usually see on a statewide ballot, seeks funds for projects for public drinking water systems and municipal wastewater treatment systems.
Question 3 has been overshadowed by referendum questions proposing a casino in western Maine and seeking to undo new taxes for the Dirigo subsidized health insurance program. The bond issue has generated virtually no public debate, although it elicited editorial support Monday from Blethen Maine Newspapers in Augusta and Waterville. Gov. John Baldacci also supports its passage.
As credit markets showed signs Monday that they were returning to normal, Lemoine expressed confidence that the financial crisis that has dominated investors’ attention in recent weeks will have no impact on the proposed bond issue. He said the $3.4 million is expected to be bundled with previously authorized bonds that will be sold in January.
“The credit markets appear to have begun to resolve themselves already,” said Lemoine. “Although there may be some bumps along the way, it appears we will be able to continue our bonding process as we have in the past.”
Question 3, as it appears on the ballot, asks, “Do you favor a $3,400,000 bond issue to support drinking water programs, to support the construction of wastewater treatment facilities and to leverage $17,000,000 in other funds?”
The bond issue is split into two equal parts.
Proceeds of the sale of $1.7 million in bonds would go into an existing revolving loan fund administered by the Maine Bond Bank and distributed by the Department of Environmental Protection. Municipalities would be able to borrow money from the fund to build and upgrade sewage treatment facilities. These funds would be matched by about $8.5 million in federal funds.
The remaining $1.7 million would go into the state’s safe drinking water revolving loan fund, administered by the bond bank and the Department of Health and Human Services. Public water systems would apply for loans from the fund to design, build or improve drinking water supplies or treatment and distribution systems. The $1.7 million would also be matched by approximately $8.5 million in federal funds.
Supporters say that the $40.5 million the state has spent since 1988 from the clean water and drinking water revolving funds have leveraged $201 million in federal funds.
“This particular bond issue involves public health and safety as well as economic development,” Lemoine said. “In a downturned economy, those kinds of projects are helpful.”
The treasurer’s fiscal impact statement says the $3.4 million in borrowing would require an estimated $841,500 in interest, assuming a rate of 4.5 percent over 10 years. That would bring the total debt to more than $4.2 million. As of June 30, Maine’s total tax-supported debt amounted to $780 million.
Lemoine noted that the amount taxpayers are paying this fiscal year for all tax-supported debt is only $4.32 percent of the state budget.
The bond proposal appears to have drawn no organized opposition.