LePage and legislators continue to spar over bonds

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Gov. Paul LePage’s statement on his $100 million transportation bond

AUGUSTA — State lawmakers and Gov. Paul LePage continued a political battle over how much Maine should borrow to fix roads and bridges and when voters should be asked to approve that borrowing Tuesday as the Legislature’s Appropriations and Financial Affairs Committee met for an overview of the issue.

On Monday, LePage again urged lawmakers to go into a special session and pass a $105 million borrowing package for roads and bridges that could go out to voters this November.

LePage said the voters need to approve the borrowing package by the end of this year so the funds will be available for the next construction season starting in spring of 2014.

“Our roads and ports continue to be a focus of economic opportunity that helps create jobs, and while the federal government is sitting on the sidelines regarding transportation funding, now is the time for the state to invest in needed infrastructure improvements,” LePage said in a statement Monday.

LePage said a bill needs to be passed by mid-August so the question can make the November ballot.

He took a partisan jab at leaders in the Legislature’s Democratic majority saying they would be delaying job creation and economic development by delaying a vote on the borrowing package until next June.

But key Democrats, including Rep. Peggy Rotundo, D-Lewiston, the House chair of the Appropriations Committee, said the Maine Department of Transportation has about $57 million available to it from a previous borrowing package that it has yet to ask for.

Rotundo said the urgency LePage was placing on the matter was pure “politics” as $41 million of the amount now available to MDOT could be used for any project on the agency’s work list.

“So when the governor is saying there’s this emergency, there’s $41 million that’s available that he has not issued,” Rotundo said. “So that’s significant, it’s very significant. It feels like the governor is playing politics with this.”

Department of Transportation Commissioner David Bernhardt also urged the Legislature to act.

“We hope the Appropriations Committee can do its work and the full Legislature can vote on our bond in a special session this August,” Bernhardt said. “The few weeks between a special session in August versus September will mean seven months of delay for projects critical to Maine’s economy. It will mean lost jobs in Maine. It will mean missed opportunities for economic development.”

In a subsequent letter to the committee Tuesday, Bernhardt noted, “recent events” had led him to believe the additional borrowing should be approved by voters this November.

In his letter, Bernhardt detailed the state’s need to act quickly to secure land for a marine terminal in Portland. He also cited the recent rail disaster in Lac Megantic, Quebec, and the bankruptcy filing of the Maine, Montreal and Atlantic Railroad following that mishap. The accident had jeopardized Maine’s rail connection to the port at Searsport and what the state’s role and financial costs would be going forward were still uncertain, Bernhardt wrote.

But Democrats still seemed bemused that Bernhardt would not testify before the committee Tuesday. Rotundo said it was difficult to understand the urgency being voiced by LePage and his commissioners when they would not come explain it to the committee.

LePage’s office also later noted that MDOT’s deputy commissioner, Bruce Van Note, had testified on the transportation bonding package before the committee during a public hearing June 12.

Democratic leaders are urging the state to take a measured approach and look closely at how much of a recently released $104 million borrowing package has been accounted for by various state departments. They also want to craft a borrowing bill that would address state infrastructure needs beyond those of the DOT.

Rotundo and state Sen. Dawn Hill, D-York, the Senate chairman of the committee, said at the end of the first half of the 126th Legislative session in mid-July, lawmakers had a bipartisan handshake agreement to come back and craft a bonding package in September that would go to voters in June 2014.

Hill also said the state Senate was expected to meet in September to hold confirmation votes on several political appointments. It made sense to convene the full Legislature at that time to save taxpayers the cost of an additional special session.

The appropriations committee called in a handful of officials and business experts Tuesday in an attempt to review about 33 separate borrowing proposals that had been set aside earlier this year.

“Whenever concerns about bonds were raised, I personally made a point of stating to all involved, especially to my Republican colleagues, that there was no special agenda at play here,” Hill said. “That it was merely we felt there was so much going on at the end . . . that we wanted to put the conversation about bonds off until August and September so that it could be very thoughtful and deliberate.”

Hill said that meant considering borrowing for more than just DOT needs. She said her intent was to stay that course.

Democrats have also said LePage, who refused to issue bonds that were previously approved by voters until the Legislature paid off the state’s Medicaid debt to hospitals, has quickly changed his tune on borrowing.

LePage previously said he wouldn’t authorize more state borrowing until the state paid off its debt to hospitals.

In a release issued early Tuesday, Democrats in the state Senate said they would proceed with careful deliberation on borrowing.

“The committee will thoroughly vet each bonding investment area in transportation, R&D, education, workforce and water quality,” the statement read. “Through its committee work and in collaboration with state departments and the executive branch, the committee is expected to draft a proposal for bonding in time for the Legislature’s vote when it reconvenes in September.”

On the docket for the committee Tuesday were four experts, including Charles Colgan, a former state economist and economic expert; Ryan Low, of the University of Maine System; Dana Connors, executive director of the state chamber of commerce; and Marc Cyr, a financial analyst with the state.

During his testimony, Colgan, now a professor of public policy at the Muskie School at the University of Southern Maine, said the time was right for the state to borrow money as interest rates remained low. Colgan also said the state had the capacity to borrow and infrastructure improvements would create jobs and boost the economy.

Colgan said Maine’s economic recovery has lagged behind the rest of the country.

“While the U.S. has recovered about 55 to 60 percent of the jobs lost during the recession, Maine has only recovered about 25 to 30 percent of the jobs lost,” Colgan said.

He said that problem was particularly evident in the construction industry, which employed about 30,000 people at the start of the recession in 2008. That number dropped to 24,100 at the bottom of the recession and had bounced back to only 26,100 as of June.

Colgan said the debate over the state borrowing for infrastructure improvements and economic development seemed to be broken into two camps: Those who wanted to borrow less in total but do it more quickly and those who wanted to borrow more but take a slower approach.

“I know there’s a debate between sooner and less, more and later,” Colgan said. “I would prefer sooner and more.”

Any borrowing package coming out of the Legislature requires the approval of two-thirds of the lawmakers and must also be ratified by voters at the polls.

Republicans were also asking for a straight up-or-down vote on the transportation bonds, saying they held individual votes on borrowing packages when they held the majority in 2010 and 2011.

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