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LePage says he won’t issue voter-approved bonds until spending ‘under control’

Gov. Paul LePage speaks at a news conference, Thursday, Dec. 15, 2011, at the State House in Augusta.
Robert F. Bukaty | AP
Gov. Paul LePage speaks at a news conference, Thursday, Dec. 15, 2011, at the State House in Augusta.
By Matthew Stone, BDN Staff
Posted May 29, 2012, at 5:19 p.m.

AUGUSTA, Maine — Maine voters will have at least four bond proposals to consider when they go to the polls in November. But even if they sign off on borrowing $75 million for transportation, water, higher education and land conservation investments, Gov. Paul LePage says he’ll make sure the bonds aren’t sold until the state’s fiscal house is in order.

LePage made the statement Friday in a message explaining his veto of a $20 million bond proposal earmarked for research and development spending. “As governor, I will not agree to issue [bonds] until we get our spending problem fully under control,” he wrote.

“I cannot personally support any of these bonds and will not vote for them at the polls in November,” LePage said in a statement Friday, announcing that he was not signing four other bonds approved by lawmakers earlier this month.

The four bonds will go to voters in November without LePage’s signature. Lawmakers will consider his veto of the R&D bond this week.

“Even with the voters’ authorization to borrow this money, my administration will not spend it until we’ve lowered our debt significantly. That could be several years,” he said in the statement.

While the state treasurer’s office ultimately puts Maine’s bonds on the market for sale, the governor can keep that process from happening. The governor and treasurer must sign a financial order before bonds can be issued and sold, so either officer can withhold his signature, said Deputy State Treasurer Barbara Raths.

“Either the governor or the treasurer could unilaterally say, ‘A bond will not go to market,’” she said.

And if it’s clear from the start that the governor isn’t going to get behind issuing a particular bond, the treasurer’s office isn’t likely to follow through with putting it on the market, Raths said.

There are a number of ways — both formal and informal — for the governor to keep bonds from being issued, said Raths and Robert Lenna, executive director of the Maine Municipal Bond Bank. He can withhold his signature from the financial order, choose not to cooperate with ratings agencies trying assess the state’s capacity to repay debt, and avoid budgeting for debt service payments, they said.

“If I was the treasurer and the governor wasn’t going to sign off on the issue, I just wouldn’t do it,” said Samuel Shapiro, who served as state treasurer from 1981 to 1996.

If voters approve any of the bond issues on November’s ballot, the state has five years to go to market with them, Raths said. And the state probably wouldn’t go to market with most bonds right away, she said.

“We don’t rush to market and borrow the money when it might not be needed for the project for several years,” Raths said. “It’s only when [the agencies doing the work related to the bond] think they’re going to need the cash when we sell the bonds.”

And there’s no requirement that voter-approved bonds be acted on at all.

Before the state issues a new round of bonds, LePage wants to address “structural problems” within the Department of Health and Human Services, said spokeswoman Adrienne Bennett. Lawmakers have passed two supplemental budgets within the past two months to address shortfalls in the agency’s general assistance and MaineCare programs.

“We understand in being government that there are required supplemental budgets,” Bennett said, “but to have to go back to the table multiple times to address a budget is concerning to the governor.”

The four bond issues voters will see on the ballot in November are:

• $51 million to fund transportation projects, including highway and bridge repairs.

• $11.3 million in higher education funds to be spent largely at the state’s community colleges.

• $8 million in water and sewer infrastructure projects.

• $5 million for the Land for Maine’s Future program, which purchases land parcels to set aside for conservation, forestry and recreational use.

Legislators will return to Augusta on Thursday to consider overriding LePage’s veto of the $20 million research and development bond, which passed both the House and Senate with support from more than two-thirds of members, the threshold lawmakers would need to override the veto.

http://bangordailynews.com/2012/05/29/politics/lepage-says-he-wont-issue-bonds-until-spending-under-control/ printed on October 30, 2014