May 2, 2012 – The Legislature’s Appropriations and Financial Affairs Committee recently gave near unanimous support to five separate bond proposals totaling $95.6 million in needed investments to help create jobs in Maine. 

“These public investments will create jobs now and grow good-paying jobs for the future,” said Rep. Peggy Rotundo, D-Lewiston, the lead House Democrat on the committee. “The state could afford to do even more to create jobs but there was little political will from our Republican colleagues to do so.”

That’s the good news. The bad news is that the governor has said he won’t sign any bond proposals if he doesn’t get his proposed changes to the outstanding budget for the Department of Health and Human Services for 2013. 
“Or, in other words,” quoting from a recent Portland Press Herald editorial, “make the deep cuts to healthcare coverage for the state’s neediest people that lawmakers twice refused to do, or give up any hope for transportation and other bonds this year that would invest in Maine to make the state’s economy grow.”

The five separate proposals now endangered by the governor’s position include $51 million for transportation improvements; $7.9 million for water and wastewater treatment; $20 million for research and development grants; and $5 million for the land conservation.
Among them is a $5 million bond funding the Land for Maine’s Future Program. Two thirds of the House and Senate must approve the LMF bond rather than voting on it as part of a package. For more than two decades the highly successful LMF Program has provided critical funding to protect forestlands, shorelines, working farms and waterfronts, salt marshes, mountain summits and other treasures of Maine’s natures heritage for generations to come. 
Republicans and Democrats also split votes on an $11.3 million bond to improve higher education facilities and competitiveness. Democrats offered a proposal that would give an additional $3 million in funds to local campuses in the university system.

“Democrats think students at the local campuses from Aroostook to York should have the same opportunity to have improved laboratories and classrooms,” said Rep. John Martin, D-Eagle Lake. “No campus should be shortchanged.”

The committee divided the bond package into five separate proposals, breaking with the traditional process for crafting one single bipartisan bond package for the Legislature to consider sending to voters.

“We are concerned that the separate vote will set-up one or more of the proposals to fail,” said Senator Dawn Hill, D-York. “If all five bonds pass the Legislature, the Republicans have given the governor a menu of options to reject rather than a single bipartisan package that was negotiated in good faith that we could all stand behind.” Hill added, “All five proposals will create jobs and give our economy the shot in the arm it desperately needs.”

Maine has lost more than 1,000 jobs since 2011 and was recently rated 50th for personal income growth according to the U.S. Bureau of Economic Analysis. The Association of General Contractors said the state lost 500 construction jobs from February to March this year alone.

Fiscal experts from the Legislature’s Office of Fiscal and Program Review told lawmakers earlier this week that the state had the capacity to borrow more than $200 million in the next two years, paying debt service at a conservative level of between four to six percent of the state’s two-year budget. 
Again, from the same Portland Press Herald editorial, “Now is a good time to borrow. Interest rates are low, our credit rating is excellent and the construction industry is recovering slowly from the recession. LePage creates a false choice. Health care and infrastructure investment are two entirely different government services that should be dealt with independently, not balanced against one another.”

According to the fiscal office’s analysis, debt service payments from 2013 to 2015 will decline by nearly $30 million.

Maine has a history of paying down its debt quickly. The state typically bonds for 10 years, not 20 or 30 as other states do. 

The bond proposals will now be considered by the full House and Senate and could still be amended by legislative leaders.

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