PORTLAND — Gov. Paul LePage on Tuesday announced a wide-ranging plan to repay hospital debt approaching $500 million, release voter-approved bonds for highways and other public improvements, and construct a new prison to replace the aging, inefficient one in Windham.

Speaking at a press conference at the construction site of the University of New England College of Dental Medicine, LePage said his plan will create jobs and inject $700 million into Maine’s economy in 2013. The proposal will be of particular help to hospitals, which can hire workers to fill the positions of those who were laid off because of the state debt.

By paying off the hospital debt, the state will rid itself of the stigma of not paying its bills while giving a much-needed boost to the economy, he said.

“We are in an economic crisis as we speak,” LePage said. “The state of Maine’s revenues are down, they’re down by $200 million.”

The Republican governor said he wants to get his proposals enacted quickly by the Democratic-majority Legislature, noting that timing on the hospital debt is critical to ensure the state gets the full federal match.

He’s submitted an emergency bill to cover $186 million the state owes to hospitals for Medicaid services dating to 2009, which would trigger $298 million in federal funding. He would get the state’s share of the money from bonds to be paid off with future liquor sales. The state will regain control over liquor sales in mid-2014.

With the full $484 million repaid, the governor would release $105 million in voter-approved bonds for transportation, land conservation, clean water and energy-efficiency projects. Democrats, who have made jobs the centerpiece of their agenda, have been pressuring LePage to allow the voter-approved bonds to go to market in hopes of stimulating the economy.

LePage is also proposing $100 million in government facilities bonds to build a replacement for the minimum- and medium-security Maine Correctional Center in Windham. The current compound, whose mostly-male population totals 622 inmates, has been expanded and modified in piecemeal fashion for several decades, compromising efficiency.

LePage said Republican legislative leaders told him they are behind his bill, but he’s not confident that Democrats will embrace it.

Democratic Senate President Justin Alfond of Portland said he agrees that hospitals should be paid back, but said the governor’s plan is thin on details and the math doesn’t add up in paying for revenue bonds using liquor revenues. The governor should also release the voter-approved bonds whether or not revenue bonds are issued to pay hospitals, he said.

Still, Alfond said he’s glad to see the governor put forth a proposal.

“We will look at it, we will evaluate it, if we need to make changes we will,” he said.

After LePage’s presentation at the press conference, hospital and construction company representatives told reporters that LePage’s plan is vital for them.

When the state pays its outstanding debt, hospitals will be able to stem the tide of job losses that have occurred the past several years, said Maine Hospital Association President Steve Michaud.

“It will also allow us to stop borrowing against lines of credit (that) many of our hospitals have been doing just to make payroll, make vital investments into hospital facilities and pay local business for the services they provide to our members,” he said.

Associated Press writer Glenn Adams in Augusta contributed to this report.

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