Maine's Republican Governor and Democratic leaders have resumed their battle over bonds.
Gov. Paul LaPage and Democrats are struggling over the issue of state revenue sharing with localities, with the governor saying he doesn't want more than $70 million of bonds sold to replenish a portion of the state cash pool that's been disbursed for projects around the state unless the practice of revenue sharing ends.
However, Democratic Treasurer Neria Douglass said Monday the governor has already signed an order approving the bonds' sale. Douglass said she planned to go ahead with the sale in June.
"We're in some sort of turmoil but I'm trying to move forward in a positive way," Douglass said, adding that she found the situation frustrating.
The battle marks a resumption of a partisan war over the state's finances. From February 2011 to June 2013 LePage had declined to approve the sale of voter-approved bonds, saying he first wanted the state to pay off its Medicaid debt to the state's hospitals. After months of wrangling, LePage and the Democrats approved liquor revenue bonds to pay the Medicaid debt and LePage released the voter-approved bonds.
Maine has already drawn $51 million from the state government's cash pool and transferred it to bond projects, Douglas said. While transferred, not all of this money has actually been spent. LePage may sue the state departments to attempt to claw back the funds, Douglass said. The state was anticipating proceeds from the June bond sale to replenish the cash pool.
Douglass said Maine would be seeking to raise about $70 million through the June bond sale, and that the bond would be somewhat larger than this amount.
The current year's budget had $40 million allotted to revenue sharing with a source of funding having been approved. In early February both houses of the Maine legislature passed a $40 million bill specifying the sources of funding. The bill would use $21 million from the state's rainy day fund, which has about $60 million. The rainy day fund is different from the state cash pool.
LePage's finance commissioner has objected that the rainy day fund is already too small, according to the Bangor Daily News.
Both houses passed the revenue sharing bill with more than the two thirds votes needed to override a gubernatorial veto. However, the governor could still veto the bill and send it back to the legislature with the hope that he could gain enough Republican votes to prevent an override vote, Douglass said.
LePage has not disclosed his plans on the revenue sharing bill and his spokeswoman did not return a call.
The clash over bonds is "most unsettling for the business community," said Jeff McCabe, Democratic assistant majority leader of the Maine House of Representatives.
The draw on the rainy day fund this fiscal year would be a one-time event, McCabe said. The government will add money to it in the future.
Douglass said she planned to go ahead with the sale in June
