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Legislature Looks to Pare Down $1 Billion in Bond Proposals to $150 Million Allowed in Budget

There are well over $1 billion in bond proposals pending before the Maine Legislature, but only a fraction of that amount is likely to go before the voters for approval, as lawmakers are constrained by the budget and by politics.

The budget recently passed under the duress of a state shutdown includes enough money to support just $150 million a year in new bonds.

“If we have a different mix between one year or another, or we go above that number, we’re going to have to recompute what our projected debt service will be and figure out how to pay for that,” says Westbrook Democratic state Rep. Drew Gattine, who co-chairs the Appropriations Committee, which is talking with legislative leaders and the governor over the next few days to see what mix of borrowing is politically achievable.

Complicating the discussion is the fact that Gov. Paul LePage wants bonds for research and development, student loan forgiveness and $100 million a year for transportation projects. Commissioner David Bernhardt told lawmakers that funding is crucial to road and bridge repair and construction, as well airports, port and rail projects.

“Maine has roughly double the number of state highway miles of roads as New Hampshire, yet our federal transportation funding is about the same. This means Maine has about double the number of miles per capita to maintain and about half the funding per mile to do it,” he says.

Norway Republican Rep. Tom Winsor, the lead for House Republicans on the panel, says while there is strong support for the transportation bond, there are also strong concerns about increasing the state’s overall debt beyond what is paid for in the current budget.

“We’re going to have a disappointed governor and a disappointed Legislature,” he says. “It’s always a balancing act where what we try to do it, look at the needs and the capacity.”

Winsor says the state does not have the resources to meet all of the needs identified in the bond mix, and that some of the borrowing may not actually meet those needs. He says the proposal to forgive student debt for those that stay in Maine for five years, for example, does not address the root problem, which is the huge increase in the cost of higher education over the years.

“In 1962 when I graduated from high school, my tuition at the University of Maine was $400,” he says. “If you adjust it over time for inflation to 2017, it is only $3,200. Current tuition is $8,300.”

Gattine says some bonding decisions may have to wait for the January session because of the high bar for state borrowing that’s set in the state constitution.

“Ultimately this has to pass through the Legislature with two-thirds, so things that have broad support not just by one party but across party lines have a lot more chance of success,” he says.

Once the proposed borrowing does get the two-thirds vote in both the House and Senate, the voters get the final say at referendum.

Most bonds proposed by the Legislature do get voter approval, but some past proposals dedicated to higher education and corrections have come up short at the ballot box.

This story was originally published July 17, 2017 at 5:15 p.m. ET.