AUGUSTA — This year’s legislative session is notable for something Maine lawmakers didn’t do – send a bond package to voters.

Lawmakers submitted 29 bills seeking bonds for a range of projects such as railroads, clean water and sewer upgrades, roads and bridges, and energy efficiency during the session that’s winding down. But a decision was made to set them all aside this year and carry them over for reconsideration during next year’s session.

Gov. Paul LePage set the tone in February when he declared in his budget address that he supported no new bonds, borrowing or deferred payments of any kind over the next two years.

Senate Majority Leader Jonathan Courtney said voters last fall expressed concerns that the state had too much debt and needed to get it under control before it borrows more.

“I would expect that there may be some interest in some transportation infrastructure bonds next year. But I think the people of Maine want us to be a little more careful with what type of long-term obligations we take on for the state,” said Courtney, R-Springvale. “I think the administration also felt strongly that we needed to get our financial house in order before we went out and borrowed more money. The new state budget takes a huge step in that direction.”

House Speaker Robert Nutting, R-Oakland, said he has supported bonds in the past for long-term improvements such as roads, bridges and other capital projects, provided ample money for debt service is budgeted.

“The governor and the treasurer have not advocated for any bonds this year,” said Nutting. “We will wait and see what the economy looks like in the second session and may put together a bond package then.”

The state’s tax-supported bond debt is listed on the treasurer’s website as $1 billion as of June 30, 2010, but the figures will be updated in a few days. There are also $95 million in bonds that are authorized but not yet issued. However, the big worry in Augusta has been the unfunded liability in the state retirement system, estimated at $4.4 billion. The new $6 billion two-year budget takes steps to chip away at the total.

The decision not to approve a bond package this year is part of a multipronged strategy, which also includes tax breaks and regulatory changes, to improve the state’s business climate, state Treasurer Bruce Poliquin said Tuesday.

Taking a timeout from bonds “is a major statement to business that we’re deadly serious about changing the way we do business in the state of Maine,” said Poliquin.

The treasurer plans a news conference Thursday that will cover related financial issues, including the state’s credit rating, recent sale of $108 million in bonds that had previously been authorized, and the state budget that was signed Monday by LePage. Proceeds from the bonds sold June 2 will be used to fund highway and railway construction, research and development, and other capital projects.

Poliquin said the national rating agencies Standard and Poor’s and Moody’s have both held steady their credit assessment of Maine state government. The S&P rating on the general obligation bonds is AA, negative outlook and Moody’s is AA2, stable outlook.

 

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