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Baldacci proposes bonds
for projects, nearly 2,000 jobs

By Susan M. Cover scover@mainetoday.com
MaineToday Media State House Writer

AUGUSTA — Gov. John Baldacci proposed a $79 million borrowing package Wednesday that he said would create nearly 2,000 jobs.

The package includes $62 million for highway, port and rail projects, including a deep-water cruise ship berth in Portland. It also would provide $17 million for environmental and energy needs.

"This is not a laundry list of ideas," Baldacci said during the announcement in his office. "Instead, it's focused on investments to build Maine's economic capacity into the future while creating jobs today."

Three bond proposals are already on the June ballot: $33.5 million for weatherization, wind power and education; $25 million for economic development, including projects at the soon-to-be-closed Brunswick Naval Air Station; and $10.25 million for environmental projects.

Baldacci's proposal came a week after Democrats in the Legislature proposed a $99 million bond package. Both proposals will go to the Appropriations Committee for consideration.

Sen. Richard Rosen, R-Bucksport, a member of the Appropriations Committee, said he thought bond negotiations were completed last year when lawmakers agreed on a $150 million package to be voted on in three installments. At the time, Republicans would not go higher because they felt $150 million was a responsible level for the entire two-year budget cycle, he said.

"I thought we had a negotiated agreement for the biennium," he said. "I have to admit, to me, it feels like Democratic gubernatorial primary politics at play."

Nevertheless, Rosen said that if Democrats can prove there is money to pay for additional debt, he will take a closer look at the contents of the proposals -- particularly money for transportation.

Baldacci, who set aside money in the budget to begin paying back the bonds, vowed to work with Republicans to put together a plan. No bonds will move forward without Republican support, because bonds require two-thirds votes in the House and Senate.

"I'm going to build bipartisan support," Baldacci said.

His proposal and the bigger one by Democrats have some similarities.

Both call for $17 million to $20 million to buy and maintain the Montreal, Maine & Atlantic Railway, which has more than 200 miles of track in Aroostook County. The company has told the federal government that it plans to abandon the railroad as soon as this summer.

Both plans also propose $5 million for passenger rail in Lewiston-Auburn and $5 million to $7 million for water and wastewater projects.

One new project in Baldacci's proposal is $8 million for the Ocean Gateway Deep Water Pier in Portland.

"When you talk about the megaberth in Portland, it's going to be critical because they tell me they have the opportunity to triple the number of cruise ships coming in," Baldacci said. "You're talking about tourism and economic development streaming into Maine."

Baldacci also calls for $28 million for highway projects, which is projected to support 750 construction jobs. The money would pay for about 14 miles of highway reconstruction and 31 miles of paving across the state, according to the Governor's Office.

Transportation Commissioner David Cole said the state has spent all of its federal stimulus money for transportation, so it is looking to take on new projects this summer.

"These are all bread-and-butter projects," he said. "They have the added benefit of creating jobs now."

The state has about $508 million in outstanding general obligation bonds and $140 million in bonds approved by voters but not yet borrowed upon, according to the state Treasurer's Office.

Standard & Poor's rates Maine bonds "AA," which implies "very strong capacity to meet financial commitments," according to the company.

Ryan Low, commissioner of the state Department of Administrative and Financial Services, said Maine pays off its bonds in 10 years -- a more aggressive payback schedule than most other states. In the 2012-13 budget, the state will retire $150 million of its debt.

Baldacci said the state must be ready to move forward.

"I know some people are concerned about borrowing, but we can't sit around and hope and wait for the economy to improve," he said.

Senate Minority Leader Kevin Raye, R-Perry, said the governor's plan, while less expensive than what legislative Democrats proposed, concerns Republicans.

"I think it's still too large," Raye said. "It's a step in the right direction. There's significant concern among Republicans in the Legislature about our capacity for borrowing."

The Associated Press contributed to this report.

MaineToday Media State House Reporter Susan Cover can be contacted at 620-7015 or at:

scover@centralmaine.com