AUGUSTA — Democratic and Republican lawmakers coalesced Monday behind a $105 million bond proposal for highway and road repairs but deadlocked over taking on additional state debt to finance land conservation, broadband expansion and environmental programs.
Gov. Janet Mills had summoned the Legislature back to Augusta for a special session to deal with bonds after the parties failed to strike a deal before adjourning in June. The final product by the end of Monday’s gathering was much the same as it would have been in June, however, with Republicans supporting bonds for transportation projects but blocking state borrowing for other initiatives.
Republicans’ opposition to $58 million in bonds frustrated Democratic legislative leaders and Mills.
“I’m sorry it’s come to this,” Mills said Monday afternoon when it became clear that three of the four bond measures would likely fail to pass. “I’m kind of sorry I called them in.”
Mills said voters would know who blocked their opportunity to weigh in on the borrowing packages. She also pointed out that interest rates were at historic lows, which could save the state millions over time.
“The people are going to know, who decided not to let the people decide in November, to support the National Guard and the crumbling buildings and facilities that they are trying to work in,” Mills said. “The people will know who voted not to let the people decide to support high-speed internet in rural Maine.”
Republicans, in turn, blasted Democrats for opposing their proposal in June for a transportation-only bond measure and continued to accuse the majority party of going on a “spending spree” with the current $8 billion budget and borrowing proposals.
“Republicans did not have enough votes to stop Democrats from spending 99.995 percent of all available state monies (including the budget surplus) and protecting small businesses, workers and taxpayers from onerous new regulations,” Assistant House Minority Leader Trey Stewart, R-Presque Isle, said in a statement. “Today, we did have the votes to stop them from adding to their irresponsible spending spree. Transportation infrastructure has to become a core priority when we budget, not a last-minute borrowing request after Democrats spend all the money.”
Mills had initially proposed a $239 million state borrowing package, but whittled it down to $163 million before Monday’s special session.
The Senate voted 32-0 to approve the transportation bonds, while the House passed it on a vote of 127-8. But the other three bond measures failed in both chambers because they fell short of the two-thirds majorities needed to send the borrowing questions to Maine voters.
In addition to $105 million for highway, bridge and transportation projects, the package proposed borrowing $15 million for broadband expansion as well as $8 million for improvements to career and technical centers, and National Guard facilities. Mills also proposed $20 million in bonds to replenish the Land for Maine’s Future conservation program and $5 million each for municipal sewer and water projects, hazardous waste cleanup and an Efficiency Maine fund for heat pumps.
As general obligation bonds, all of the measures would need approval from voters during the November election. Fiscal notes attached to the bills assume interest rates of between 4.25 percent and 4.75 percent for 10 years, although actual rates could be lower because of current market conditions.
Democrats highlighted that the $8 billion, two-year state budget adopted in June assumes up to $300 million in new debt, and the spending being proposed was modest but still critical to the state’s safety and economy.
“Mainers deserve to rest easy knowing the Maine National Guard is going to be there when we need them most,” said Sen. Erin Herbig, D-Belfast. She added that improvements to the state’s career and technical education facilities were also coming at a time when skilled tradespeople are in high demand.
“Electricians, plumbers, welders. Very practical skills that our economy demands right now,” Herbig said.
But Republicans argued that the state should wait to see what the economy does before tacking on more to the state’s debt load. They said none of the borrowing needs to be approved and could wait until the Legislature reconvenes in January.
“Anyone who is not economically illiterate knows that you borrow money when revenue is down and pay it back where revenue is up,” said Rep. Billy Bob Faulkingham, R-Winter Harbor. “To spend every penny of available money now … and then ask to borrow hundreds of millions of dollars on top of it is reckless and irresponsible.”
But Rep. Drew Gattine, a Westbrook Democrat who co-chairs the budget-writing Appropriations and Financial Affairs Committee, said the $8 billion budget passed by lawmakers along bipartisan lines earlier this year includes “debt service” payments for an even larger bond package.
“This is a very modest level of bonding compared to what other states bond and compared to what Maine voters have voted on and supported in the past,” Gattine said. “And money to support this bond was included in the budget.”
Republican lawmakers had insisted in June that the large borrowing package be split up into individual bills so that members could vote for the borrowing they supported – particularly for transportation – while opposing bonds they opposed. Unable to strike a deal, lawmakers adjourned in June without a bond package with the understanding that they could revisit the issue during a special session.
On Monday, Republicans accused Democrats and the Mills administration of failing to consult with them over the bond proposals. But Democrats countered that Republican leaders were consulted on the bond packages and were well aware of the plans for Monday.
Maine State Treasurer Henry Beck, whose office handles bond sales, had called on lawmakers to pass the four bills.
“I urge the Legislature to send a bond package to voters this November,” Beck said in a statement. “If voters approve, we will then have the option of going to market under the right conditions. There is no requirement that the treasurer sell bonds only in the month of June. This is an issuer’s market and we should not assume market conditions will improve between now and an unknown distant date.”
Lawmakers could consider additional borrowing proposals in January following the failure of the three bond measures Monday. Advocates for land conservation, for instance, are likely to continue pushing for additional funding for the Land for Maine’s Future program, which uses bonds to leverage federal and private matching dollars to preserve forests, farmlands and working waterfronts. Voters consistently approve LMF bond measures by wide margins at the polls.
“Maine has missed an important opportunity to make smart investments in the Land for Maine’s Future program that would have helped protect high value conservation and recreational lands as well as working waterfronts and valuable farms in our state,” Maureen Drouin, executive director of Maine Conservation Voters, said in a statement. “Land for Maine’s Future is a popular and effective program that has earned the overwhelming support of Maine voters time and again.”
“It’s a shame that legislative Republicans have sacrificed the conservation values of Maine people for broader political gain.”
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