Maine corrections officials are looking at new borrowing for the nearly $150 million renovation and expansion of an aging prison, but don't want to ask voters for the authority.
The Department of Corrections, under the direction of Gov. Paul LePage, is planning improvements at the 97-year old Maine Correctional Center and wants to use government facilities bonds to finance the $149.7 million project.
Some lawmakers have argued however that general obligation bonds, which require voter approval, should instead be utilized to finance improvements for prisoners.
The State Senate Criminal Justice Public Safety Committee on Wednesday unanimously passed a bill proposed by the LePage administration that would authorize borrowing by the Maine Governmental Facilities Authority, which would not require voter approval, to support the correctional center improvements.
"Lawmakers recognize there are structural problems in the Windham facility that require significant funding to address and government facility bonds are one tool in our toolbox to do so," Maine House Speaker Mark Eves, D-North Berwick, said in a statement. "After much discussion, the Criminal Justice and Public Safety Committee voted to unanimously support this approach. I look forward to talking with Committee members about their decision as we determine how to best resolve concerns about our correctional facilities."
Corrections officials say the expansion of the correctional center in Windham would allow more inmates to be housed there and save the state around $10.5 million in operating costs annually by allowing it to close or consolidate other facilities.
Plans call for replacing most structures with buildings that could house 736 male and 243 female inmates.
There are now 675 total inmates housed at the existing prison.
State Sen. David Burns, R-Whiting, was among a few of the Criminal Justice Public Safety Committee members to express concerns about not seeking voter approval for prison facility borrowing in hearings leading up to the March 2 vote. A vote before the full legislature is expected sometime in the spring.
"I've never been supportive of government facilities [bonds],"said Senator Burns during one of the February work session meetings on how to finance the project. "I think it bypasses the people. They need to have a voice on this."
He was not present for Wednesday's committee vote.
The annual bond payment is projected at $11.14 million for most of the 20-year bond life. Jody Breton, deputy commissioner for the Maine Department of Corrections, said issuing bonds through the MGFA is preferred since process would be "much faster."
Moody's rates the MGFA one notch below the state's GO bonds at Aa3 because the bonds are subject to legislative appropriations.
Discussion of borrowing for a Maine prison project comes in the wake of LePage holding up some voter-approved bond sales in a dispute with lawmakers over increasing timber harvesting on state-owned lands.
LePage threatened to block bond sales in the spring of 2014 before lifting his objection when the Democratic-controlled legislature agreed to maintain rather than decrease the size of the state's rainy day fund.
The Republican governor announced on Feb. 22 he would submit legislation to use more than $72 million in surplus revenue for the rainy day fund, which he stated is vital to maintain solid credit ratings.
The state's GO bonds are rated Aa2 by Moody's Investors Service and AA by Standard & Poor's. Moody's analyst Julius Vizner noted that the state's fund balance has been improving under LePage to a $11 million level after nearly bottoming out in 2009.
"Maine generally has below average debt levels," said Moody's analyst Julius Vizner. "Their economy is one of low volatility, but at the same time there is limited growth."
LePage spokeswoman Adrienne Bennett did not respond to emails or calls seeking comment on the Maine Correctional Center project.
Charlie Colgan, a retired professor of public policy at the University of Southern Maine's Edmund S. Muskie School of Public Service, said LePage's support to issue bonds for the prison enhancements while opposing other forms of borrowing stems from this initiative being driven by people in his own administration.
"He has supported borrowing proposals when they are from his administration," said Colgan. "It's when there are borrowing proposals from others outside his administration where he has objected."
Government facilities bonds have funded previous Maine prison improvements and upgrades to state buildings through the MGFA.
The lease-revenue bonds are often preferred since receiving voter approval can sometimes be challenging, according to Colgan, an economist who was chair of the State of Maine Consensus Economic Forecasting Commission from 1992 to 2010. Colgan said voters are especially reluctant to approve measures that improve prison conditions.
"It would be a hard lift to get voters to approve the bonds mostly because I think most people don't appreciate how bad the prisons are," said Colgan. "It's tough to explain that."
Colgan conducted a cost-benefit analysis of the planned prison upgrades that found significant long-term savings.
The economist determined that avoided expenses from the project combined with $10.5 million annual operating savings to the state would lead to the state saving $2 for every dollar spent over a 30-year period.
Colgan said government facilities bonds through the MGFA are the most realistic way for the project to get off the ground soon and going the voter-approval route will only lead to escalating costs.
"The governmental facilities board was created to allow the state government to improve its facilities without needing voter approval for each upgrade," said Colgan. "It gives the state ability to improve facilities and pay off the debt with operational savings."
