Maine Gov. John Baldacci last week announced aproposal to sell up to $79 million of debt to help finance infrastructure projects throughout the state and create a projected 1,898 jobs.
The new borrowing plan comes as Standard & Poor’s last week revised its credit outlook on Maine to negative from stable while affirming the state’s AA rating.
“The outlook revision reflects the state’s weakened financial position and diminished liquidity,” according to a statement from credit analyst Henry Henderson.
“Although a supplemental budget has been proposed to close the 2010-2011 budget gap, lack of timely action to balance the budget which leads to further erosion of financial position and liquidity could lead to a downgrade,” Henderson warned.
Moody’s Investors Service and Fitch Ratings assign their Aa3 and AA ratings to the state, respectively, and both assigned stable outlooks. Maine has $530 million of outstanding general obligation debt.
In Baldacci’s bond proposal, transportation projects — including highway upgrades, railway track projects, and seaport improvements — will receive the bulk of the proceeds.
In addition, the bond package will support drinking water and wastewater projects, wind energy initiatives, and energy-efficiency programs.
“This is a fiscally responsible program that will put people to work,” Baldacci said in a prepared statement. “At this critical junction, we must be prepared to take action to make our state stronger and to promote economic growth.”
Maine’s unemployment rate is 8.2% as of January, according to the U.S. Labor Department.
Senate President Elizabeth Mitchell, D-Augusta, and House Speaker Hannah Pingree, D-North Haven, earlier this month released a $99 million bonding plan to help finance capital projects and create jobs in the state.
That bond proposal includes larger allocations than the governor’s proposal for highway repairs, as well as for upgrades to public schools and higher educational facilities.