Maine's first-year governor sets bond plan in motion
A bond proposal from first-year Maine Gov. Janet Mills aims to spark economic growth through investments in infrastructure and workforce development.
The Democrat's embrace of bonds stands in contrast to predecessor Paul LePage, a Republican who regularly intervened to prevent the issuance of debt that had been approved by voters and lawmakers — in one case after they had already priced.
Mills said the $239 million bond proposal she released Tuesday would not only fund capital projects but also tackle Maine’s labor shortage and the lack of broadband service in some areas of the state. The proposal calls for $189 million of bonds to go before voters this November with the other $50 million appearing on the 2020 ballot.
The governor's plan calls for $105 million of the borrowing to fund transportation spending on roads, bridges, ports, rail and airports. An additional $65 million of the bonding would replenish the Land for Maine’s Future program to enhance wastewater treatment and foster new municipal renewable energy projects. Mills also wants to invest $50 million of the borrowing to expand broadband access with another $19 million for workforce development to bolster career and technical education.
“My administration is tackling the challenges we have head-on through targeted, reasonable investments that we will strengthen the economy and develop a strong, skilled workforce and support a clean energy environment and help fix our aging infrastructure,” said Mills during a press conference announcing the bond proposal.
Mills said the $19 million for workforce development is crucial for the state’s efforts to combat its aging demographics. She wants to invest $5 million of this funding to provide childcare services to workers seeking new training or education.
Moody's Investors Service and S&P Global Ratings both affirmed Maine's general obligation bonds in May at Aa2 and AA, respectively, with stable outlooks. The Moody's report noted that sustained population and employment growth were key credit factors for Maine to get an upgrade. Around 26% of the state is projected to be age 65 and older by 2027, according to Moody’s.
"We recognize that like so many states, despite our strong economy and healthy revenues, long-term demographic trends remain a challenge," said Maine State Treasurer Henry Beck. "Appropriately, Governor Mills’ bond package will benefit efforts meant to directly address this challenge by investing in workforce, broadband and research and development. We are also confident we remain in a stable position to meet all debt obligations."
The proposed $239 million of new borrowing requires approval from the Democratic-controlled state legislature before going before voters. Maine has had a successful track record of passing bond measures with all but one of 36 proposals from 2011 to 2018 receiving voter approval totaling just over $1.1 billion in value.
The latest bond imitative was released nearly four months after Mills proposed an $8.04 billion two-year budget plan that seeks to fund a number of capital projects through bonding, $531 million of dedicated state Highway Fund revenue and leveraged federal revenues. The proposed fiscal plan, which would hike spending by 11% over the current budget, would be backed by existing income and sales tax revenue growth, according to Mills.