$1.3B in bond proposals to be discussed

Posted March 08, 2009, at 10:14 p.m.

AUGUSTA, Maine — Lawmakers will begin hearings this week on more than $1.3 billion worth of bond proposals to fund everything from land conservation and home weatherization to repairs of college buildings and historic meetinghouses.

But with the country in the grips of a major recession and Mainers cutting their own budgets, legislators will have to carefully weigh how much debt voters will be willing to stomach when the bond proposals appear on the ballot.

“These are not normal times and we can’t treat this as just another bond package,” said Sen. Kevin Raye from Perry, who is the Senate Republican leader.

Leading the lengthy list of proposals is a borrowing package by Gov. John Baldacci’s administration that would spend $306 million of voter-approved bonds over the next three years. The largest chunk of that money — $67.5 million — would be earmarked for research and development grants as well as economic development, while $43.4 million would flow into environmental initiatives.

“We know we must make these investments,” Baldacci said in announcing his bond proposals last week. “Our economy depends on investing in our people, and giving them the tools they need to be successful.”

The Legislature’s Appropriations and Financial Affairs Committee will kick off public hearings Tuesday morning on the governor’s and several other environment related bond proposals that include funding for the well-known Land for Maine’s Future program. Other bond proposals on the agenda Tuesday would put money into state parks, wastewater treatment and protection of “traditional hunting grounds.”

Baldacci’s proposal would replenish LMF’s now-empty coffers with $18 million for land conservation and $3 million for working waterfront preservation. The LMF program, which requires at least a dollar-for-dollar match by applicants, has helped protect nearly 500,000 acres during the past two decades.

Another bill, sponsored by Appropriations Committee co-chairman Sen. Bill Diamond, D-Cumberland, would allocate $87.5 million in bonds to LMF over the next four years. Two other bond measures propose $30 million and $40 million for LMF, each over two years.

Tom Abello, senior policy adviser with The Nature Conservancy, said LMF funding helps protect the working forests, farmlands and coastal areas that are key to Maine’s natural resource-based industries and tourism.

“If you look at the past four times the people of Maine have voted on LMF, it has been approved by more than 60 percent every time,” Abello said. “So I think people in Maine recognize that these are investments in our natural resources and even when the economy is down these are smart investments.”

In November 2007, voters approved $17 million in bonds for LMF; however, that money covered less than half of the applications received by the program’s board last year.

After last summer’s oil crisis, it’s no surprise that energy is a hot topic in the Legislature this session, and lawmakers are seeking tens of millions of dollars in bonds to attempt to address the issue in various ways.

Sen. Philip Bartlett, D-Gorham, wants to provide $50 million in low-interest loans for homeowners’ energy conservation projects. Rep. Jon Hinck, D-Portland, has proposed $15 million in bonds for low-interest loans for household or business weatherization projects, as well as $10 million to increase training opportunities for high-demand “green” jobs.

House Speaker Hannah Pingree, D-North Haven, is the sponsor of a separate $25 million bond proposal to encourage “sustainable, environmentally friendly housing.”

Other sizable or unusual bond proposals not part of Baldacci’s package include:

ä $200 million over four years for competitive grants for research, development and commercialization to stimulate economic growth and job creation. The bill — sponsored by Rep. Emily Cain, an Orono Democrat and co-chair of the Appropriations Committee — was a recommendation of a special legislative committee.

ä $25 million in competitive grants for cancer research and development.

ä $93.5 million for renovations at the state’s public colleges and universities.

ä $2.5 million to repair traditional meetinghouses.

If enacted, Baldacci’s investment package will go to voters in two rounds: $265.8 million on this November’s ballot and $40.4 million on the June 2010 ballot.

Raye said he supports bonds that will help stimulate the economy, such as for transportation, water and sewer infrastructure and higher education projects. But Raye said lawmakers need to be aware that Mainers are “very, very sensitive” to debt right now.

At the end of 2008, Maine’s actual and authorized tax-supported debt totaled nearly $920.7 million, according to the state treasurer’s office. Almost half of that amount — $453.3 million — stemmed from general obligation bonds.

Maine’s tax-supported debt was at $618 per capita at the end of 2008, compared to a national median of $889. Its tax-supported debt as a percentage of personal income was 1.9 percent compared to a national median of 2.6 percent.

The Associated Press contributed to this report.

kmiller@bangordailynews.net

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