Bonds fall under governor’s purview

Before taking out loans, responsible individuals sit down and consider their finances. Likewise, legislators and voters should understand the state’s current financial obligations before approving more bonds.

Bonding involves borrowing money the state does not have, and Maine’s hardworking taxpayers must repay these loans. Thus, there are safeguards.

L.D. 1378, one of this legislative session’s contentious bills, proposed to force the executive branch to release the rest of the Land for Maine’s Future (LMF) bonds. Since 1997, voters have approved $96 million in LMF bonds with $11,470,000 not yet issued. Unissued bonds, like all bonds, have a constitutionally set expiration date. To date, Mainers are still paying down $38 million in outstanding LMF bonds, and we have paid $16 million in interest. Customarily, the state’s treasurer sells bonds in June when interest rates are lowest.

During the legislative process, L.D. 1378 was greatly expanded to include all general obligation bonds, not just LMF bonds. The proposal failed.

Former Governor Baldacci weighed in: “…you may need to have those emergency powers instituted and I think it calls upon a governor and single Chief Executive of the state and I hate to see those powers being eroded.” I agree. It is not wise to eliminate the bonding authority of the executive branch. The final decision to sell bonds is the constitutional responsibility and fiduciary duty of the sitting governor, not the treasurer.

Maine’s governors and the experienced economists of the executive branch should be involved with the timing and issuance of bonds. The current bonding process satisfies the requirements of the Maine Constitution; the IRS; and the bond market, which helps keep our rates low and protects the taxpayers.

The state treasurer’s website offers valuable information regarding the state bond process and our current debt summary: http://www.maine.gov/treasurer/debts_bonds/index.htmlinformation.

Rep. Heather Sirocki

House District 28, part of Scarborough

Member of the Appropriations and Financial Affairs Committee