AUGUSTA, Maine — Gov. Paul LePage is telling state agencies that plan to sell bonds in order to complete major projects that they shouldn’t count on those borrowed funds, even though the borrowing has been approved by voters.
“It is our duty as public servants to ensure each taxpayer dollar is spent appropriately to earn the highest return at the lowest cost,” the letter reads. “That is especially true when we are spending borrowed money — money that has to be paid back by future taxpayers, with interest.”
The decision by the LePage administration affects about $40 million in bonds that voters have approved in recent years but that the state treasurer’s office has not yet sold at market. Last month, the governor said he wouldn’t allow four bonds, which will go to voters this fall even though he declined to sign them, to be sold.
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.
The state has five years to sell bonds from the date voters sign off on them.
The affected projects range from improvements to community dental clinics to energy upgrades at University of Maine System campuses to airport, ferry and railroad improvements, according to a list of approved bond projects from the state treasurer’s office.
Ryan Low, the university system’s executive director of government relations, said staff at the seven-campus system are going through records to determine which projects might be affected by the governor’s bonding policy.
“We just got the letter late this afternoon,” Low said. “We’re just trying to pull together our stuff right now: what are the projects we have right now and what the timing would be.”
Officials from other affected agencies either couldn’t be reached or weren’t prepared to comment late Tuesday.
The letters from the LePage administration come about two weeks after the governor said he wouldn’t allow four bond packages set to appear on November’s ballot to be sold, even if approved by voters, until the state’s “spending problem is under control.”
LePage’s letter encourages the agencies to pursue their projects without using bond revenue. The governor says it “may be prudent” to issue bonds starting in January 2014.
The governor’s decision sparked criticism from Democrats on Tuesday who pointed out that the amount of money the state needs to pay in debt service is set to decline over the next three years.
“The governor is making a terrible mistake by holding jobs and economic growth hostage to partisan ideology,” Rep. Emily Cain of Orono, the House Democratic leader, said in a statement. “He will be halting needed investments, especially as Maine’s economy has already shrunk while other states are growing.”
LePage spokeswoman Adrienne Bennett said the governor recently signed a financial order allowing a bond sale and that he’s uncomfortable with devoting more than $100 million annually from the state budget to debt service payments.