Democratic leadership held a press conference Thursday to ask Gov. Paul R. LePage to issue voter-approved general obligation spending bonds. The Governor has repeatedly stated that he will not allow the State to incur additional debt until its fiscal house is put in order, a stance that has caused Democrats in the Legislature and the State Treasurer’s office to seek ways to issue bonds without executive approval.
Assistant Senate Majority Leader Troy Jackson (D-Allagash) said LePage is exercising too much control over the bonding process. “I’ve just never seen anyone try to have such an iron fist on the people of Maine’s mentality and this Legislature, and that is probably going to backfire,” said Jackson. “Hopefully it will backfire in the end for him.”
Democratic leaders are working on a two-thirds majority in the Legislature that could force the Governor’s hand, a move that would require only eight House Republicans to swing in their favor.
Democrat-appointed State Treasurer Neria Douglass has been exploring the legality of issuing bonds without the the Governor’s consent since January.
According to correspondences obtained by The Maine Wire via a Freedom of Access Act request, Douglass began exploring options of how she might issue bonds over and against the Governor’s desires shortly after taking office at the beginning of the year.
In a January 27 email to Douglass, former Deputy Treasurer Barbara Raths advised Douglass to request a written opinion from Attorney General Janet T. Mills regarding her plans to outfox the Governor on bonds. “You should probably write a request to the [Attorney General] for an opinion on if the treasurer can issue bonds w/o gov,” wrote Raths. In her reply, Douglass wrote, “I do think a written request to discuss the issue would be smart.”
Douglass, a former State Auditor and Democratic Senator from Auburn, said she wants the bonds issued for the economic benefits she believes will follow.
“I want the people of Maine to have the jobs from the projects they approved,” said Douglass. “The Governor should issue general obligation bonds that have been authorized now,” she said.
Republicans in the Legislature have a different take on fiscal priorities and believe Democrats are trying to avoid hard discussions of the Governor’s budget and hospital repayment plan.
“We’ve been here before—the Governor has already said that he’ll issue these bonds, but we must pay our bills before taking on new debt,” said House Republican Leader Ken Fredette (R-Newport).
“Credit rating agencies and Maine families would agree that it’s fiscally irresponsible to borrow more money without a plan to pay your bills. We must pay our bills and get this money into Maine’s economy,” said Fredette. “The campaigning needs to stop.”
Assistant House Republican Leader Alexander Willette (R-Mapleton) said the Democrats’ heated rhetoric isn’t helping budget negotiations. “The Democrats are accusing the Governor of holding the bonds hostage, but they’re holding payment of the hospital debt hostage,” said Willette.
“The difference is, Republicans want a trade-off and the Democrats don’t. We want to pay the hospitals and issue the bonds,” he said. “We must do the fiscally responsible thing — we must do the right thing and pay our bills before increasing our debt.”
The conflict between Democrats and Republicans over bonds is likely to exacerbate fears that the State is headed for another credit rating downgrade. According to a source who asked to remain anonymous, Maine’s credit rating could receive another downgrade, and soon.
“For a host of reasons — over-spending, Medicaid problems, the hospital debt — we could very well be headed for another downgrade this spring,” the source said.