AUGUSTA, Maine — The debate over hundreds of millions of dollars worth of state borrowing proposals, an issue which often dominates the end of legislative sessions, will likely wait until lawmakers return to the State House next January.
Sen. Dawn Hill, D-York, who chairs the Appropriations Committee, said Wednesday that she and others on the budget-writing panel don’t want to rush such monumental decisions amid the bustle of the end of the legislative session. Lawmakers on Wednesday were pushing to finish their business for the session, though they expect to return next week to deal with last-minute items such as vetoes by Gov. Paul LePage.
“Given everything we have going on at the moment, leadership has had no discussions about a bond package,” said Hill. “Rather than slapping something together, the Appropriations Committee would like to work on it during our next couple meetings. We just want the process to be thoughtful.”
The Appropriations Committee is one of the few legislative committees that meets regularly while the full Legislature is adjourned. At issue are at least 32 general obligation bond proposals by legislators and the governor that all told equal nearly $1.2 billion. Though there is no chance the Legislature would ask voters to approve that sum, the bonds range from a series of relatively smaller amounts to improve Maine Community College System campuses to a $100 million package proposed by Gov. Paul LePage for Department of Transportation infrastructure projects. There are also economic development funds, money for ports and railroads and funding for land conservation
Sen. Patrick Flood, R-Winthrop, the only Republican senator on Appropriations, said some members of his caucus are generally supportive of borrowing but that there has been no agreement or discussions about how much they would support. And then there’s the question of how much money is available in the biennial budget bill passed last week by the Legislature to make payments on the borrowing.
“Our caucus is solidly behind some of the transportation and education initiatives,” said Flood. “We’ll probably have a lot of these answers by this time next week.”
Meanwhile, the LePage administration is working on the sale of some $104 million in bonds previously approved by the Legislature and then by voters in 2010 and 2012. LePage has held up the issuance of those bonds for various reasons, including that he wanted to see debt service payments dip below $100 million a year. The governor also used the bonds as a bargaining chip to encourage the Legislature to approve his plan to pay hospitals some $484 million in past Medicaid debt.
Sawin Millett, who is LePage’s finance commissioner, told reporters this week that the bulk of the previously approved bonds will be issued between now and next January, with about $19 million waiting for January 2015.
“We intend to pull out all the stops to move forward with them,” said Millett. “The treasurer’s office, the governor’s office and I think the Legislature expects us to move forward with all due haste.”
The administration is also preparing to issue a revenue bond for as much as $187 million for the Medicaid debt payment to Maine’s 39 hospitals. That bond, which would trigger federal matching funds to pay the balance of the $484 million owed to hospitals, differs from general obligation bonds because there is a revenue source — a renegotiation of the state liquor contract — in place to pay it off.
LePage has also proposed a $100 million revenue bond for major upgrades at the Maine Correctional Center in Windham. In its budget deliberations, the Appropriations Committee called for a study of the state’s correctional needs before moving forward with the project. LePage contends that it could be paid off using efficiencies created by the construction of the new facility.
State Treasurer Neria Douglass said she awaits information from the administration regarding exactly which specific projects the already approved bond money will benefit. She said that’s a routine step that is usually taken before the sale of bonds so that the state borrows only what it needs for specific projects and no more.
“I’ve been ready since day one to issue these bonds,” said Douglass. “I want to get to the business of this.”