Thursday, April 24, 2014
AUGUSTA — Throw out competing proposals for awarding the next state liquor contract and draft a new bill that draws on the best features of both measures.
(FILE)Liquor on display at Downeast Beverage on Commercial St. in Portland Thursday, September 6, 2012.
Shawn Patrick Ouellette/Staff Photographer
That's the latest thinking of members of the Legislature's Veterans and Legal Affairs Committee who agreed Wednesday that a so-called committee bill would be the best way to resolve the partisan dispute.
"That's what I'm leaning towards," Sen. John Tuttle, D-Sanford, co-chairman of the committee, said at the conclusion of a work session.
Rep. Robert Saucier, D-Presque Isle, echoed the sentiment, saying "I'm really, really ready now. I'm willing to do one bill."
The committee will meet again Friday.
Both of the competing bills tie the state liquor contract to repayment of debt to the state's 39 hospitals, which are owed $484 million in overdue Medicaid reimbursements. The state owes about one-third of the amount but must pay its share before the federal government will release matching funds.
Several lawmakers on Wednesday appeared to support aspects of Gov. Paul LePage's proposal, L.D. 239. It would award a 10-year contract for managing the state's liquor operations, leaving the state to use annual profits to repay a revenue bond that would be used to retire the hospital debt.
The competing bill, L.D. 644, proposed by Senate Majority Leader Seth Goodall, D-Richmond, would collect an upfront payment of $200 million from the chosen vendor, allowing the state to repay hospitals without borrowing money. Under the proposal, the state also would share a portion of annual profits that exceed a reasonable return for the vendor.
Sen. Garrett Mason, R-Lisbon Falls, said he believed the state could borrow money through a revenue bond at a lower rate than a vendor would charge to finance the upfront $200 million payment.
"There is a cost to borrowing money. That cost is going to be factored into an upfront payment. My money is on the fact that it will be more expensive than what the state can borrow at," Mason said.
Rep. Louis Luchini, D-Ellsworth, co-chairman of the committee, said "a lot of the hesitance of the upfront payment is the cost of money."
Goodall said there were many similarities in the competing bills, such as revenue-sharing with the state, having one vendor operate the liquor business and giving incentives for the vendor to boost the business.
"It really appears this is boiling down to one central issue -- the risk," Goodall said. "Getting the money upfront is worth more to you than getting it over time."
He said the LePage proposal forces the state to take a risk in getting money over 10 years, while his measure would collect the money upfront.
Despite continuing disagreement over the best approach for collecting liquor revenues, Goodall sounded upbeat about Wednesday's session. "We are much closer to resolving this than we were a few weeks ago," he told the committee.
Staff Writer Jessica Hall can be reached at: 791-6316