June 21, 2018
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As leftover bond proposals get another look, will the state consider more borrowing?

By Eric Russell, BDN Staff

AUGUSTA, Maine — Lawmakers heard testimony Monday on six bond proposals representing more than $200 million, but there was no consensus on whether those or any other borrowing scenarios would get support when the Legislature convenes in January.

All six bills that were discussed Monday were carried over from the Legislature’s first regular session that wrapped up in June.

Republican leadership in the House and Senate, as well as Gov. Paul LePage, were lukewarm to the idea of borrowing more money at a time when Maine’s fiscal house was in disarray.

Therefore, the Legislature voted in June to hold off on any new borrowing at least until 2011.

Adrienne Bennett, the governor’s spokeswoman, said Monday that the governor has not changed his stance on bonding. In general, she said, LePage does not believe that borrowing money is the most appropriate way to improve the state’s fiscal picture, but Bennett did not rule out support from the governor.

“We’re exploring what a bond package would look like, but it’s not something we’d do until we’ve taken a hard look at all government spending first,” she said.

Among the bond bills discussed Monday by the Legislature’s Appropriations Committee were:

• LD 225, sponsored by Sen. Christopher Rector, R-Thomaston, which asks for $50 million to fund research and development projects, both public and private, in the areas of energy, biomedicine, aquaculture, forestry and information technology, among others.

• LD 409, sponsored by House Minority Leader Emily Cain, D-Orono, also is an R&D bond but asks for $100 million to fund what Cain called targeted technology sectors.

• LD 777, also sponsored by Cain, asks for $40 million to fund capital improvements within the University of Maine System, specifically those that support the science, technology, engineering and math, or STEM, programs.

• LD 874, sponsored by Assistant Senate Minority Leader Justin Alfond, asks for $27 million to fund initiatives spread across the University of Maine System and Maine’s community college system.

• LD 979, sponsored by Rep. Peter Edgecomb, R-Caribou, seeks $7.2 million to create an animal and plant diagnostic facility at the University of Maine.

• LD 1386, sponsored by Rep. Sara Stevens, D-Bangor, asks for $500,000 to fund the Challenger Learning Center of Maine, located in Bangor.

In all, 29 bills were submitted seeking bonds for a range of projects.

The remaining 23 bond bills that were carried over from the 1st regular session will be taken up by the Appropriations Committee between now and the end of the year.

Some of the bond proposals overlap and likely would be consolidated if they move forward.

House Speaker Robert Nutting, R-Oakland, has said he’s not diametrically opposed to bonds but the economic climate has not made a strong case for borrowing more money.

“I have sometimes been in favor of some bonds for long-term improvements like roads, bridges and other capital projects, provided that we have the money available in the budget for the payment of the debt service,” he said recently.

Cain, however, had a different opinion. She said bonds are helpful, particularly in a down economy, because they often create jobs directly. Cain also said that research and development and education bonds are the best kind of investments because they benefit Maine down the road.

“To me, we can’t afford not to do a bond package in 2012,” she said. “You don’t have to read national reports to know how bad our roads are, just drive around Maine. You don’t have to look at how we’re behind on our investments in R&D to know it’s time for us to replenish.”

The state has a long history of borrowing money to fund certain projects, usually for transportation infrastructure, research and development, or education-related projects. In fact, dating to 1951, there have been only a dozen years in which no bond package was sent to voters.

Earlier this month, Eric Conrad of the Maine Municipal Association said despite the state’s position on bonds, cities and towns across Maine had not stopped borrowing.

“Municipal leaders in Maine realize that, despite the state of the national economy, borrowing money and investing in projects is wise during a time when interest rates are at or near their historic lows,” he said at the time.

Data from the Maine Municipal Bond Banks showed 34 local governments borrowed funds from the bond bank in 2011.

That compares with 35 in 2010, 27 in 2009, 30 in 2008 and 32 in 2007.

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