June 13, 2012

Governor holds off on issuing of bonds

About $40 million approved by legislators and voters in 2009 can’t be spent without his OK.

By Dennis Hoey dhoey@pressherald.com
Staff Writer

Gov. Paul LePage is refusing to issue $40 million worth of bonds that have been authorized by the Legislature and Maine voters for projects ranging from wind energy research to the redevelopment of the Brunswick Naval Air Station.

Paul LePage
click image to enlarge

Gov. Paul LePage

Robert F. Bukaty/The Associated Press

Related Documents

PDF: LePage's letter to affected state agencies

In a letter sent Tuesday to the University of Maine System and various agencies that are in line for bond funding, LePage told them not to budget for bond revenue "without clear approval from me."

He said it would not be prudent for the state to issue new bonds before January 2014. Nearly all of the state borrowing was authorized by the Legislature and voters in 2009.

LePage's decision to hold off the bonds for two more years could affect a range of projects, from as little as $50,000 for upgrades to Augusta's airport to more than $10 million for projects in the university system.

"It is our duty as public servants to ensure each taxpayer dollar is spent appropriately to earn the highest return at the lowest cost. That is especially true when we are spending borrowed money -- money that has to be paid back by future taxpayers, with interest," LePage said in the letter. "Until our debts -- and more importantly, our spending -- are back under control, adding more of a burden would be fiscally irresponsible."

A list obtained by The Portland Press Herald shows that the affected projects include:

• Redevelopment of the Brunswick Naval Air Station, for which $2.9 million has been authorized.

• Port improvements for Eastport and Searsport, $900,000.

• Energy and infrastructure upgrades at all University of Maine System campuses, $3.6 million.

• The Maine marine wind energy fund -- a university project that provides money to develop one or more ocean wind energy demonstration sites, $7.3 million.

Ryan Low, spokesman for the University of Maine System, said he first saw LePage's letter at 4 p.m. Tuesday. He said the system will need more time to assess the impact.

Low said some projects that were eligible for bond funding may have started already, so contractors might be owed money.

"The governor's letter doesn't prohibit these projects from going forward. He just wants justification for them," Low said. "If we find ourselves in the middle of a project, then we will be sure to bring it to the governor's attention."

John Moncure, chairman of the Midcoast Regional Redevelopment Authority, which is redeveloping the former naval air station into Brunswick Landing, said he is not sure how withholding bond money will affect the effort.

He said, "We might be able to work around a project or postpone a project. We share the same financial stress that the state is feeling. We'll just have to work through it like everyone else."

Democrats said the governor's decision will damage Maine's already-fragile economy and represents a slap in the face to voters, who voted with the expectation that the bond money would be spent.

"The governor is making a terrible mistake by holding jobs and economic growth hostage to partisan ideology," said House Minority Leader Emily Cain, D-Orono. "These investments have already been approved by the voters. He will be halting needed investments, especially as Maine's economy has already shrunk while other states are growing."

Assistant House Majority Leader Andre Cushing, R-Hampden, said he would like to speak with the governor in more detail about his decision. Cushing said that, traditionally, legislative leaders are apprised of major policy decisions.

"I know the governor has expressed on several occasions great concern about our state's fiscal status and that we don't have a plan for paying off all our debt," Cushing said. "I think what we've got here is a governor who is trying to be fiscally prudent."

Cushing noted that just because voters authorize bonds, the money doesn't have to be borrowed immediately. Some bonded projects are funded in phases over a period of years, he said.

Adrienne Bennett, LePage's spokeswoman, said voters can only authorize the government to issue bonds. Exactly when the money is borrowed is left up to the governor, she said. "I think that is what has been lost in a lot of the media coverage."

Bennett said it is not unusual for bond authorizations to be idle for several years before the bonds are issued. She said the governor can wait on a bond authorization for as long as five years.

Jody Quintero, spokeswoman for the House Democratic office, said LePage does have the authority to wait five years before issuing authorized bonds.

In his letter, LePage said that while each project may be worthwhile, he encouraged the agencies to pursue them without incurring any further debt.


– State House Writer Steve Mistler contributed to this report.


Staff Writer Dennis Hoey can be contacted at 791-6365 or at dhoey@pressherald.com


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