AUGUSTA, Maine — Gov. Paul LePage says he has not changed his position that any bond issued by any state agency needs to be approved by voters at referendum.
LePage said he is shocked at a vote by the legislature’s Appropriations Committee to kill a bill requiring an advisory referendum on bonds sold by the Maine Educational Loan Authority and said he opposes the measure they did approve requiring voter approval for some bonds issued by the Maine Government Facilities Authority.
“I have not changed my position at all,” he said in an interview. “All this borrowing needs to have voter approval.”
During his campaign for governor and in the first session of the 125th Legislature, LePage has not waivered from his position that even moral obligation bonds, those that are not directly backed by the state, need voter approval in some form.
“I am shocked that they killed that bill for student loans,” he said. “I am shocked that they would kill that.”
The Maine Educational Loan Authority has the authority to issue revenue bonds for loans to students for college. Sen. President Kevin Raye, R-Perry, sponsored the bill that would have the voters approve that borrowing authority for three years so that every bond sale would not need voter approval. Members of the Appropriations Committee unanimously rejected the bill.
“We really didn’t discuss this much in caucus,” said Rep. Peggy Rotundo, D-Lewiston, the Democrat lead on the panel. “We don’t see this as necessary.”
Sen. Richard Rosen, R-Bucksport, the committee co-chairman said his caucus felt the same. He said there is a significant difference between bonds paid by the taxpayers and bonds paid by students that borrow for college.
“We heard the arguments in the testimony, but when we took a look at the existing statutes and the mechanism that is available to that particular entity, and we thought that it has worked well,” he said.
The panel split on party lines over legislation that would require the Maine Government Facilities Authority bonds receive voter approval. Since 1992, the authority has issued hundreds of millions of dollars in bonds to build or renovate courts, state buildings, prisons and psychiatric hospitals.
As of June 30th, 2011, the authority had bonded debt of about $172 million paid for by state Appropriations. General obligation bonds authorized by the voters at referendum totals $725 million.
LePage wants all future bonds issued by the authority to be approved by the voters, but Republicans on the Appropriations Committee voted to exempt those issued for court facilities. Sen. Roger Katz, R-Augusta, offered the amendment to exempt court borrowing.
“The reality is that for instance, a courthouse project in York County is unlikely to get statewide support, or a court project in Aroostook County is not likely going to get statewide support,” he said.
Rep. John Martin, D-Eagle Lake, argued that if building projects for general government need to get voter approval, then so should building projects for the courts.
“The effect of this amendment is to only protect the courts,” Martin said.
He said the amendment was made at the request of the courts in a letter to the committee.
Katz agreed that was where he got the language in his amendment. He said his proposal would in effect go back to the days when the Maine Government Facilities Authority was the Maine Court Facilities Authority.
“I have a real problem with that,” LePage said. He said he has not seen the proposal but he will review the bill if lawmakers pass it when they return May 15 and then decide what he will do if it makes it to his desk.
Rep. Rotundo said her caucus opposed the Katz amendment because they believe that if any bonds issued by the Government Facilities Authority need voter approval, they all should need approval. She said Democrats voted against the bill because they do not agree all borrowing needs to have voter approval.
“I am very concerned about the governor blocking bonds in general,” she said. “There are some important projects where hospitals, for example, are paying more to borrow money for construction than they should have to because the governor will not sign off on the bonds.”