Mainers to decide whether to borrow $76 million for bond questions on Tuesday’s ballot

By Nick McCrea, BDN Staff
Posted Nov. 03, 2012, at 4:08 p.m.

BANGOR, Maine — When Maine voters hit the polls on Tuesday, Nov. 6, they will be deciding whether the state should borrow a total of nearly $76 million — with about $19 million in interest — toward infrastructure, higher education and conservation projects.

The bond questions on this year’s ballot are:

Question 2: “Do you favor an $11,300,000 bond issue to provide funds for capital to build a diagnostic facility for the University of Maine System; for capital improvements and equipment, including machine tool technology, for the Maine Community College System; and for capital improvements and equipment at the Maine Maritime Academy?”

Question 3: “Do you favor a $5,000,000 bond issue to purchase land and conservation easements statewide from willing sellers for public land and water access, conservation, wildlife or fish habitat and outdoor recreation, including hunting and fishing and deer wintering areas, and to preserve working farmland and working waterfronts to be matched by at least $5,000,000 in private and public contributions?”

Question 4: “Do you favor a $51,500,000 bond issue for improvements to highways and bridges, local roads, airports and port facilities, as well as for funds for rail access, transit buses and the LifeFlight Foundation, which will make the state eligible for at least $105,600,000 in federal and other matching funds?”

Question 5: “Do you favor a $7,925,000 bond issue to be expended over two years for revolving loan funds for drinking water systems and for wastewater treatment facilities, which will make the state eligible to secure $39,625,000 in federal grants?”

Mainers have a history of backing bond initiatives — voting “yes” on 31 of the 33 bond questions on ballots since 2001, according to results compiled by the Maine State Law and Legislative Reference Library.

The most recent rejected bond initiative was voted down narrowly by voters in November 2005. It would have secured $9 million for building renovations at University of Maine System campuses. Prior to that, Mainers lopsidedly turned down a $25 million 2002 bond to build a new correctional facility in Machias and make improvements at Maine Correctional Center in South Windham.

However, this year Maine Gov. Paul LePage has tried to tighten the state’s fiscal belt, citing the need to rein in spending and borrowing.

Early this summer, LePage said he wouldn’t allow the four bond packages on the Nov. 6 ballot to be sold, even if approved by voters, until the state’s “spending problem is under control.” Also included in that decision was about $40 million in bonds that already had been approved by voters but not sold at market.

“I’m not going to speculate on something that the voters haven’t voted on,” the governor’s spokeswoman Adrienne Bennett said Thursday. “But I’ll tell you [the governor’s] stance hasn’t changed.”

“We are trying to balance a budget,” Bennett said, adding that it’s not uncommon for governors to hold back voter-approved bonds and that LePage would continue to show “fiscal restraint until the state’s financial situation improves. We cannot absorb additional debt at this time.”

Supporters of the bond initiatives say they would fund badly needed repairs to roads and bridges, create and protect jobs, better equip colleges and universities and more.

Question 4 has the highest price tag of the four bond initiatives and has brought about some of the most vocal support. Most of the money — $41 million of the $51.5 million — would go toward the repair and reconstruction of highways and bridges deemed vital to business and public safety. The remainder would go to port facilities, transit buses, rail services and airports. The bond funding also is expected to make the state eligible for an addition $72 million in federal funding.

On Oct. 31, city officials from Bangor and Hampden, as well as the Port of Searsport and representatives of the transportation industry, threw their support behind the transportation bond during a press conference.

Susan Lessard, Hampden town manager and member of the Maine Board of Environmental Protection, said that while her community doesn’t support debt, these expenses can’t be put off any longer.

“This bond issue is not a luxury — it’s a necessity,” Lessard said. “If we are serious about the idea of attracting and maintaining business in Maine, whether those businesses are service or manufacturing or industrial, we need to improve the infrastructure.”

Question 2 would bring $7.8 million to the University of Maine System for an animal and plant diagnostic facility at the University of Maine. The facility also would support research in the identification and monitoring of pests and invasive species in the state.

“The University of Maine has an important role in protecting jobs, safeguarding the food supply, and protecting Maine citizens from potentially threatening diseases,” said John Rebar, executive director for the UMaine Cooperative Extension.

UMaine diagnostic facilities provide unique services to business owners, farmers, state government and others, but the university’s laboratories and equipment are outdated, Rebar said.

Officials at the diagnostic lab also have said they are concerned about biosecurity. The lab currently is located near the center of the University of Maine campus. The funding would help build a new 18,000-foot facility with improved biosecurity, laboratories, an attached greenhouse, animal autopsy lab and more.

The Maine Community College System would receive $3 million for infrastructure improvements and equipment that would allow it to expand programs that are high in demand as enrollment continues to grow, the system has said. The remaining $500,000 would go to Maine Maritime Academy for equipment and to expand infrastructure capital improvements to meet its own growing enrollment numbers.

Question 3 would authorize the state to issue up to $5 million to fund the Land for Maine’s Future program, which in the past 25 years has expanded its focus from public access-based land conservation to farm and working waterfront preservation.

Supporters say Maine’s natural resources yield tangible economic benefits and that the program protects Maine’s value as a place to live, work the land, hunt, fish and enjoy nature.

“The program has bolstered the natural resource industries that are the backbone of Maine’s economy and improved our quality of life,” Lands for Maine’s Future says on its website.

A February 2012 study by The Trust for Public Land stated that “every dollar invested in land conservation through LMF returned $11 in natural goods and services to the Maine economy.”

The Sportsman’s Alliance of Maine, which endorses the bond, lauded the part of the bond that designates funding to conserve deer habitat and help restore healthy deer numbers, which could bring more hunters and wildlife watchers to the state.

Question 5 would authorize nearly $8 million for drinking water and wastewater treatment programs. A total of $3.6 million would go into the state’s safe drinking water revolving loan fund, which is administered to eligible public water systems by the Maine Bond Bank and Department of Health and Human Services. The remainder would go into an existing state loan fund that helps municipalities construct and upgrade wastewater treatment facilities.

Passage of Question 5 would yield a 5-to-1 return in federal dollars on Maine’s expenditure to replenish the Drinking Water State Revolving Loan Fund, which was established in 1997 as a financing tool to minimize the impact on ratepayers of public water system capital projects, and a similar Clean Water Revolving Loan Fund created in 1987 for wastewater treatment.

Maine’s State Treasurer Bruce Poliquin has released a statement in advance of the election in an attempt to clarify exactly what voters are approving when they vote “yes” on a bond.

In the statement, Poliquin writes that voter approval of all four bond questions would allow the state treasurer to borrow nearly $76 million by selling general obligation bonds to investors. Like any loan, the bonds would accrue interest over their 10-year life, which Poliquin estimated at $19 million.

Furthermore, there is another $41 million of borrowing authorized by past Legislatures and approved by voters that has not yet been borrowed, Poliquin said.

“The annual interest and principal payments to the bondholders will be funded primarily by personal and corporate income and sales taxes paid by Maine citizens, businesses and visitors,” Poliquin wrote.

The treasurer’s statement will be posted at polling places on Election Day.

Poliquin did not return a message requesting an interview on Thursday, but in a recent blog post on the state’s website he decried spending that has driven the country deeper into debt.

“Ten short years ago little was discussed about our accumulating public debt,” Poliquin wrote. “The media wasn’t interested in government’s addiction to spending money it doesn’t have. Many years of this financial recklessness by career politicians has caught up with America.”

“Here in Maine, we’re getting it right and leading by example,” Poliquin continued. We understand that living within our means, paying off debt, reducing taxes, simplifying business regulations, and pushing down energy and health insurance costs will attract business investment and jobs.”

http://bangordailynews.com/2012/11/03/politics/mainers-to-decide-whether-to-borrow-76-million-for-bond-questions-on-tuesdays-ballot/ printed on September 21, 2014