Rating agencies’ action is welcomed on eve of referendum.

AUGUST (AP) – Word from Wall Street that Maine’s bonds will not be downgraded was welcomed by the Baldacci administration on the eve of Tuesday’s referendum on a $60 million economic stimulus bond issue package.

“I think it’s further validation that tomorrow’s bond issue makes sense,” Lee Umphrey, spokesman for Gov. John Baldacci, said Monday after the state treasurer received word on the bond ratings.

Standard & Poor’s and Fitch Ratings announced they are keeping Maine’s rating at double AA+, while Moody’s Investors Service is keeping the state at its Aa2 rating.

Word from the three leading credit-rating agencies came weeks after Maine Auditor Gail Chase said she was unable to track nearly $19 million the state Human Services Department received in welfare funds from the federal government over a period of years.

Administration officials expressed concern at the time that the fiscal questions could lead to a downgrading of the state’s bonds, which would increase the amount taxpayers will have to pay in interest when the state borrows money.

But word that there will be no downgrading “helps to ensure that the people of the state will get more for their money,” state Finance Commissioner Rebecca Wyke said. “That is the issue – how much do we pay?”

Tuesday’s statewide ballot will feature a single question, asking voters to approve $60 million in long-term borrowing that the governor has called “a very important part of the economic plan for Maine.”

It includes $37 million for biomedical research and other research and development initiatives; $8 million for affordable housing and $6 million for a municipal investment trust fund.

The package also includes $4 million for marine research, $3 million for agriculture, and $2 million for applied technology development centers in Fairfield, Greenville, Rumford and South Portland. Supporters say the bonds would draw more than $134 million in matches.

The ratings applied as a sale of $97 million in bonds that have already been authorized by voters got under way Monday.

Wyke said one factor cited by the credit agencies in maintaining Maine’s rating was how the state managed its fiscal matters amid a $1.2 billion budget gap. In March, lawmakers approved by large majorities a two-year state budget that included no major tax increases while erasing the shortfall.

“Frankly, they were pleased with the two-thirds votes” to pass the budget, said Wyke. “That is not what they’re seeing in other states.”

In the meantime, budget negotiators have agreed on a supplemental spending package that bridges a $48 million budget gap.

“The state has enacted measures to counter the shortfalls, relying on budget cuts and fully utilizing balances and reserves,” Fitch says in its rating, dated Friday.

Moody’s, which says the state “weathered the economic downturn reasonably well over the last two years,” rates Maine’s financial outlook as stable. But Standard & Poor’s maintained the state’s negative financial outlook, citing “continued financial pressures and weak revenues projected in the years ahead.”

Even though there’s only one question on the statewide ballot, Maine’s chief election official urged voters to get to the polls on Tuesday. Secretary of State Dan Gwadosky noted that eligible residents may register on Election Day so they can cast ballots.

Maine has a record of high voter turnouts, although participation tends to be lighter during primaries and special elections. Officials in many Maine communities consolidated their polls, reflecting their expectation of low turnouts.

Local issues will also be decided Tuesday in some Maine communities. In Bangor, voters will be asked if they approve of slot machines at a commercial harness racing track in the city. Augusta voters will be asked whether a middle school should be closed to save money.

AP-ES-06-09-03 1534EDT



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