After Legislature approves budget fixes, LePage says he’ll release bonds

Gov. Paul LePage
Scott Thistle | Sun Journal
Gov. Paul LePage
Posted March 21, 2014, at 5:19 p.m.
Last modified March 22, 2014, at 4:55 p.m.

AUGUSTA, Maine — The Legislature soundly approved an emergency bill Friday spearheaded by Gov. Paul LePage to restore $21 million to the state’s rainy day fund, prompting LePage to agree to release millions of dollars worth of infrastructure bonds.

Lawmakers also passed a supplemental budget bill necessary that balances the books this year and makes a big dent into projected shortfalls in 2015.

The bills both passed nearly unanimously and with zero debate. The ease with which they cruised through the House and Senate belied the heated debate that had surrounded both measures in recent weeks.

While LePage supports the rainy day fix, he’s still made no comment on whether he approves of lawmakers’ $40 million plan to balance the books in 2014. Normally, the governor proposes his own supplemental budget, but LePage — still upset over the Legislature’s override of his budget veto last year — has opted not to, saying any shortfall is lawmakers’ problem to deal with, not his.

The 2015 portion of the supplemental budget is funded in large part by the repeal of tax credits for businesses, a move that LePage and legislative Republicans have in the past said amounted to unfair tax hikes. Adding to the uncertainty is the fact the the governor has said he ’s willing to keep the Legislature in session past its scheduled mid-April adjournment — perhaps by ordering a special session this spring or summer — in order to get a supplemental budget he agrees with.

Both bills won the unanimous approval of the budget-writing Appropriations Committee in the early hours of the morning Wednesday after members worked through the night.

The governor’s bill, LD 1807, restores $21 million to the state’s budget stabilization fund after lawmakers approved a plan to use that money as part of an effort to restore $40 million of state aid to municipalities.

In a press release, the governor said he would sign the bill into law and directed State Treasurer Neria Douglass to act with “all due haste” to release the bonds, which he said will create 25,000 jobs.

LePage had blasted the revenue sharing plan, saying drawing funds from the state reserve account would hurt the state’s credit rating — a claim rejected by Democrats. The two leading national bond rating agencies told lawmakers that decisions on a state’s credit rating are not made based on any one factor.

He also said he’d delay issuance of millions of dollars worth of infrastructure bonds until the Legislature approved his plan to immediately replenish the rainy day fund. It’s a tactic that has worked for the governor before: He sat on voter-approved bonds for three years until lawmakers in 2013 passed a bill to repay hundreds of millions of dollars worth of Medicaid debt to Maine’s hospitals.

Majority Democrats on the Appropriations Committee originally approved an amended version of LD 1807 that also included about $18 million in fiscal year 2015 spending, including already negotiated merit and longevity raises for state employees and funding for education. The governor said he would only sign the “clean” version of the bill, and the committee went back to the drawing board.

In the end, that $18 million amendment was wrapped into LD 1843, the second bill given initial approval by the Legislature on Friday. That bill also fills a $40 million budget shortfall in the current fiscal year, effectively balancing the books through the end of June. The bill is fully funded by the above mentioned tax credit revisions, casino revenue and transfers from unspent accounts.

While lawmakers were silent on the floors of the House and Senate, they took to press releases after the votes to champion their work.

“When we first started our work, our committee faced an unprecedented task to build a budget from scratch with no proposal and limited information from the governor,” said Rep. Peggy Rotundo, D-Lewiston, the House chair on Appropriations. “We prevailed despite the obstacles. I’m pleased and proud to see strong bipartisan votes on these measures, which pay our bills, protect education and keep our commitments to our workers.”

“I’m glad that lawmakers from both parties were able to come together and manage Maine’s finances,” said House Minority Leader Ken Fredette, R-Newport. “We may debate the issues passionately, but we’re always committed to finding bipartisan agreement on the budget, and I’m glad we were able to do so today.”

The Appropriations Committee’s work to address the rest of the fiscal year 2015 shortfall will continue on Saturday. Appropriators and the Legislature’s Office of Fiscal and Program Review have both said the size of the remaining shortfall is still a moving target but are hopeful to pass a budget patch before session ends in mid-April.

Follow Mario Moretto on Twitter at @riocarmine.

 

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