June 25, 2018
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Democrats present jobs bond package

By Mal Leary, Maine Public

AUGUSTA, Maine — Democratic leaders unveiled a $99.2 million jobs bond package Tuesday.

In doing so, they fired the first shot in a legislative battle over borrowing, with Republican support needed to send any bond package to the voters for their approval.

“We know, here in Maine, that we cannot wait for relief from the federal government,” Senate President Elizabeth Mitchell, D-Vassalboro, said at a news conference. “We want to put people back to work.”

House Speaker Hannah Pingree, D-North Haven, said the borrowing package is “targeted and timely” and would provide significant jobs that are needed in the state.

“Without more work for our construction industry from engineers to the people moving the dirt, we are looking at a dire situation this summer,” she said.

The largest part of the bond package, $47.5 million, is for highway construction. The proposal is to have the package go to the voters at the June primary elections so some projects could be undertaken this summer.

Also on Tuesday, Baldacci administration officials said there might be competing borrowing priorities to the Democratic leaders’ plan.

“You will see the governor’s plan tomorrow,” Finance Commissioner Ryan Low said. “We have been talking for some time about a jobs bond proposal and it will be reflected in the change package.”

Low will present the governor’s priorities for changes to the budget to the Appropriations Committee. He said the governor’s priorities might not be the same as those proposed by legislators.

He said any additional bonds would take additional funding to pay for interest and principal payments within the current two-year budget.

The state has about $77 million in additional resources because of revenue re-projections and some one-time federal aid announced last month. That reduces the budget shortfall to $360 million over the current two-year budget.

The GOP is key to any bond because it takes a two-thirds vote in both the House and Senate to send a bond to the voters. While Republican senators haven’t shut the door on borrowing, Republican House members may be a hard sell.

“We are willing to talk about this, but we just got the details,” said Sen. Jonathan Courtney, R-Springvale, the GOP assistant Senate leader. “President Mitchell did come to us a few weeks ago to discuss a jobs bond, but no details and we just said we would listen.”

“I am not interested in any further bond discussions,” said Rep. Sawin Millett, R-Waterford, the GOP lead on the Appropriations Committee. “I don’t think it is timely. If you think you can borrow your way out of the difficult circumstances that we are in, somebody has a new course in economics.”

He said the state budget has no funding for additional debt service and taking some of the additional resources to pay debt service for this bond would be at the expense of restoring cuts in education and human services.

“I fully expect strong opposition to any further bond,” Millett said.

Sen. Bill Diamond, D-Windham, the co-chair of the Appropriations Committee, supports a jobs bond. He said as with all legislation, the bond packages will have a public hearing and the committee will seek to reach a compromise measure that can garner enough votes to go to the voters in June.

“It’s incumbent on us to balance the budget,” he said, but lawmakers must balance that with the obligation “to provide jobs for the people of Maine.”

Diamond said a factor that the committee likely will consider is whether a bond proposal will bring in additional federal matching funds. He said the $5.2 million for water and sewer projects proposed by Mitchell and Pingree will leverage nearly $30 million in additional federal funds.

But the largest borrowing proposals, $47.5 million for highway construction and $25 million for rail line acquisition and improvements in Aroostook and Androscoggin counties, have no federal match available.

“We have matched for all the funds that we know are available,” Transportation Commissioner David Cole said. “We can certainly use the additional funds they are talking about, but we have already matched all the federal dollars.”

He declined to discuss what the governor is proposing for highway bonding in his package, and how it will be funded.

The Democratic leader’s package also includes $15 million for energy improvements in elementary and secondary schools and $5 million for energy improvements at colleges and universities. It also includes $1.5 million for overboard discharge, underground oil tanks and culvert replacement. It is not known if whether those projects will bring in any additional federal funds.

If approved, this borrowing package would join three bond proposals already on the June 8 referendum that total nearly $69 million.

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