Details on LePage plan to restore Maine’s rainy day fund emerge

Paul LePage
Paul LePage
Posted March 06, 2014, at 5:41 p.m.

AUGUSTA, Maine — Details of Republican Gov. Paul LePage’s plan to restore about $21 million to Maine’s so-called “rainy day fund” were trickling out Thursday.

LePage has said the state has to replenish the fund to at least $60 million in order to avoid a credit downgrade by Wall Street’s bonding houses. To that end, LePage has said he will not issue about $100 million in voter-approved bonds earmarked for construction projects, including public building, road and bridge improvements statewide.

Most of the money LePage has found to restore the rainy day fund appears to come from two accounts — one involving about $10 million of unspent funds meant for general purpose aid to public schools, the other including about $11 million in projected savings in the state’s retiree health insurance program, according to documents provided to the Legislature’s budget-writing Appropriations Committee.

LePage’s finance commissioner, Sawin Millett, told reporters Tuesday full details of the plan would become available within two days, but as of midday Thursday the bill that moves the funds had not been released.

Millett said he was meeting with legislative leaders Thursday and that he, too, was waiting for the final bill language to be released by the nonpartisan Office of the Revisor of Statutes.

Earlier this year the Legislature overwhelmingly passed a bill that moved $21 million from the rainy day fund to help restore funding to the state’s revenue-sharing program, which passes a portion of the state’s sales and income tax receipts to cities and towns. LePage objected to the raid, but allowed the bill to pass into law without his signature.

Republican members of the Appropriations Committee said Thursday they were still awaiting full details of the plan but offered tentative support, noting they were pleased LePage — who had previously said he would not issue a supplemental spending plan to help eliminate a 2-year state budget shortfall of about $100 million — was now engaging in the budget-balancing process.

State Sen. Patrick Flood, R-Augusta, the lead Republican senator on the committee, said the funds LePage is seeking to use should be acceptable to both parties.

“They are areas we have used in the past and are generally not steeped in controversy,” Flood said.

Democrats on the Appropriations Committee agreed LePage’s proposed transfers did not appear overly controversial.

Senate chair of the committee, Dawn Hill, D-Cape Neddick, said they had the rough details but without a bill there was little more they could do, despite being urged by LePage to “‘hurry up and do it,’ that’s the word that keeps coming to us.”

Other Democrats on the committee said LePage should simply retract his threats over bonding and just allow his proposal to move through the legislative process.

Doing so would remove a large degree of economic uncertainty for workers who are already on the job on many of the projects in the works.

“There are institutions around the state that are waiting for bond money and they don’t need [the governor's] bill to pass first,” said state Sen. Emily Cain, D-Orono. “They want the funds that they were told were coming so that people can get to work.”

Cain said LePage “has created his own problem. Quite frankly, he should just move on and release the bonds,” she said. “It’s a manufactured problem and the only thing he is doing is holding up jobs.”

Meanwhile, State Treasurer Neria Douglass sent LePage a letter Wednesday urging him to keep the state’s commitment to projects that have already been started with funding from the state’s cash pool. Under the plan those funds would have been repaid, in part with new bond sales this year. LePage authorized that plan in July 2013.

“The State may be at risk for breach of contract with respect to contracts signed following the Financial Order issued in July,” Douglass wrote. “Stopping the orderly progress of bond projects now will cause delay in much needed infrastructure and other approved bond purposes, as well as hinder sorely needed job creation.”

Rep. Mike Carey, D-Lewiston, a House member on the Appropriations Committee, said voters expected cooperation between the Legislature and LePage when it comes to the state budget.

“People sent us here and while many of those people don’t necessarily agree with each other, they all expect us to work together for the common good.”

The committee Thursday was continuing its public hearings on proposals to solve the budget shortfall for fiscal year 2015.

 

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