LePage's plan for welfare debt moves forward



AUGUSTA – As Democratic lawmakers plan a second major push to expand Medicaid next legislative session, Republicans are touting the success of Gov. Paul LePage’s plan to payback nearly half-a-billion in unpaid debt from the same welfare program.

The administration announced Tuesday that the liquor revenue bonds, which were intended to supply new funding for the debt payment, have been sold.

“With the sale of the liquor revenue bond, Maine hospitals are now just weeks away from being repaid the more than $484 million in welfare debt owed to them,” said LePage in a written statement. “This is good news for these employers and their local communities.”

Under LePage’s plan, the state renegotiated its liquor contract, and the Maine Municipal Bond Bank is using the expected future income  from the deal as collateral for a $220 million revenue bond.

By handling the liquor contract, which was schedule to sunset this year, in this way, LePage has ensured that future lawmakers will not have access to the money. Instead, $183.5 million in bond proceeds will go directly to hospitals, with another $305 million in federal matching funds to follow.

The full payment is expected to be paid during the month of September, according to the governor’s office, which also noted that the bond received an “all-in rate,” or total interest cost, of just 3.79 percent.

“High demand from investors helped drive the interest rate down,” said Mike Goodwin, executive director of the Maine Municipal Bond Bank, in the administration’s press statement. “The interest shown by investors and the positive ratings received from the rating agencies demonstrate the strength of the liquor business in Maine.”

GOP lawmakers were quick to join the governor in trumpeting a major policy win that occurred despite strong Democratic majorities in both houses of the Legislature.

“This money will now go out into Maine’s private sector economy, where it is needed the most,” said House Minority Leader Ken Fredette (R-Newport) in a written statement.  “I’m very pleased that we are one step closer to getting checks in the hands of Maine employers that are owed millions in unpaid welfare bills by the state.”

Assistant House Minority Leader Alexander Willette (R-Mapelton) called the plan a major step towards fiscal responsibility following years of bad decision making under Democratic majorities. “The beauty of this plan was that it took the state’s liquor revenue out of the hands of future legislatures and dedicated it to paying off Maine’s debts,” he said.

While Republicans work on paying past welfare debts, Democrats are busy crafting legislation to expand the program responsible for that debt. State House sources have said that, despite constitutional provisions against introducing the same bill twice in the same session, Democratic leaders will push forward with another attempt to expand Medicaid next year.

According to the House Republican press release, falling insurance premiums as the result of PL 90 and federal subsidies for individuals buying private health insurance show that there are alternatives to expanding medical welfare.

Standard & Poor’s assigned its ‘A+’ rating and Moody’s Investors Services assigned their ‘A1’ rating to the Maine liquor revenue bond.

The Maine Municipal Bond Bank is scheduled to settle the bond sale on September 5, 2013.


  1. There can be no long term changes for the better until state legislators act to amend the Constitution of the United States to rein in the malignant metastatic federal aristocracy and restore the rights of the States and the People.
    I will support any and every candidate publicly fighting for the adoption of the Liberty Amendments!

  2. Hi!

    Welfare keeps people in a “down-trodden” position in society, and many legislators advocate this (promises) in order to keep “their positions” in society.

    It is almost ensuring votes from those who accept welfare but the rest of the people (taxpayers) have to pay for it.

    This is communism at its best.

    Take away from the producers to give to the non-producers.

    How nice!

    The people in this state are way over taxed, and many leave the state to seek their livelihoods elsewhere.

    The job market here in Maine is not adequate either.

    Thank you!

    Lise from Maine.


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