Maine voters overwhelmingly approved $120 million of borrowing to finance improvements to transportation and broadband infrastructure as the state grapples with revenue challenges caused by the COVID-19 pandemic.
The state’s $105 million transportation bond referendum passed Tuesday with 78% support, with some absentee votes still to be counted. A separate $15 million ballot measure to issue bonds for high-speed Internet infrastructure was approved with 75% "yes" votes.
The proceeds of the transportation bonds will fund improvements to Maine’s highways, bridges, railroads, ports and aviation facilities. The state borrowing will be matched by $275 million from federal funds and other sources.
Bruce Van Note, commissioner of the Maine Department of Transportation, said passage of the bond package was crucial given the sharp decline in gas tax revenues since the COVID-19 pandemic began in March. The Maine DOT is estimating $56 million less revenue for the state’s Highway Fund for the 2021 fiscal year, which would mark an 11% drop from the 2020 year, which ended June 30.
“This bond vote was more important than any other transportation bond vote in recent memory," Van Note said in a statement issued Wednesday. “Our need has never been greater, and interest rates have never been lower.”
The broadband bond would fund improved high-speed Internet access in Maine’s rural and underserved areas. It will be matched by $30 million in private, federal and local support.
“The approved broadband package is of particular interest to policymakers,” said Maine State Treasurer Henry Beck. “Such technology investments are a top priority for Gov. [Janet] Mills and the Legislature and will benefit Maine people and businesses."
Maine’s general obligation bonds are rated AA by S&P Global Ratings and Aa2 by Moody’s Investors Service with stable outlooks. Both rating agencies affirmed the state’s GO debt in May, citing strong reserve levels prior to a $119 million bond
The Mills administration has projected a revenue shortfall of around $500 million for the 2021 fiscal year, which would mean revenues would be 13% below estimates in the state's current two-year budget cycle.
“Reserves have helped stabilize their credit,” S&P credit analyst Jill Legnos said. “That will help them through this recession.”
