Maine Gov. Paul LePage has ended his threat to try to block bond sales after getting his way on maintaining the size of the state's rainy day fund.
The Democrat-controlled legislature had voted to use $21 million of the about $60 million rainy day fund for aid to Maine localities. The Republican governor said this would have left too little money in the fund.
After negotiations, a bill was prepared to restore the rainy day fund while still paying the municipalities. The bill passed on March 20 and the governor announced he would sign it on March 21.
"The $21 million to replenish the rainy day fund is from unspent funds in other accounts and re-projections of retired state employee healthcare costs," said the Maine Senate Democrats deputy communications director, Amy Cookson.
"Essentially, retired state employees are healthier so we're not spending as much as we thought we would be. We're shifting that money to the rainy day fund," she said.
"It was irresponsible to raid $21 million from the state's rainy day fund to avoid making tough choices on the budget," the governor said. "This short-sighted move would have left the state with only three days of cash flow to operate in an emergency. There was a high risk of a downgrade in our credit rating, which would have cost Maine taxpayers millions in higher interest rates on bonds."
On March 25 Democrat Maine Treasurer Neria Douglass told The Bond Buyer that Maine planned to sell $75 million to $80 million in general obligation bonds in June.
In a separate action late in the week of March 21, legislators passed a bill to balance the current fiscal year budget and reduce a shortfall in fiscal 2015. Maine budgets are for two years.
LePage has not made clear his position on the supplemental budget bill.
