AUGUSTA (AP) – Planning to sell about $60 million in general obligation bonds within the next week or so, Maine has had its bond rating under review by several rating agencies on Wall Street.

Two agencies have maintained their previous ratings for the state. A third agency is expected to raise Maine’s bond rating a notch, providing a lift for the state in a regular series of reviews accompanying bond sales.

But by the end of the business day Monday, no formal report had been received from Standard & Poor’s. That didn’t stop the Baldacci administration, however, acting on what officials said had been verbal notification, from trumpeting an upgrade.

Gubernatorial spokesman David Farmer acknowledged that nothing in writing had come in yet from S&P. The governor’s office, nonetheless, issued a statement by Baldacci celebrating an improvement.

“Standard and Poor’s has recognized the progress we are making in Maine and the incredible work that has been done to put the state on solid financial footing,” Baldacci said in the statement. “The upgrade also reinforces the importance of passing the budget I submitted to the Legislature, which includes further reforms to improve the state’s finances.”

On Friday, Moody’s Investors Service said it was maintaining its Aa3 general obligation bond rating for Maine.

“Maine’s financial operations have improved in recent years reflecting management’s efforts to control spending and rebuild balances depleted during the recession. At the same time, the state has stepped up its spending on K-12 education as mandated by a citizens’ initiative approved in 2004,” Moody’s said in its report.

“The state’s liquidity position has also improved, making an expected fifth consecutive cash flow borrowing unnecessary for fiscal year 2007. Maine was one of the first states to regain jobs lost during the recession although the state’s economic momentum has since slowed and is expected to trail the nation in the near term,” Moody’s said.

On Monday, Fitch Ratings, using a similar analysis, assigned Maine an AA rating.

Maine’s rating “reflects the state’s low debt burden and very rapid debt amortization,” the Fitch report said. “Financial reforms are institutionalized, including expenditure limits, debt controls and provisions to fund reserves. … Economic performance has been modest and is expected to continue at a steady but slow pace. State finances remain pressured by tax relief, increased costs for education and health care and potential threats from citizens’ initiatives.”

On April 4, a $295 million state borrowing package representing a bipartisan deal between majority Democrats and minority Republicans won overwhelming approval in the full Legislature.

Provisions call for the $295 million to be divided for three separate statewide referendum votes in June and November of this year and June of 2008.

The three-part package, which carries a heavy emphasis on transportation infrastructure and a total interest cost of nearly $84 million over the life of the proposed 10-year bonds, came before the full Legislature with a unanimous recommendation from the Appropriations Committee.

The Baldacci administration said next month’s vote on June 12 will take up a proposed $113 million for roads, bridges, transit facilities and recreational trails and $18 million for grants supporting the construction of wastewater treatment facilities and improvement of Maine’s public water systems.


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