LePage Reneges on $100M Statewide Maine Jobs Bond Contracts, Day 2

Posted on February 21, 2014. Filed under: Uncategorized | Tags: , , , , , , , , |

(Following up on last night’s news: “BREAKING: Governor LePage Reneges On $100M Jobs Bonds; Bounces $59M State Of Maine Check”)

To review, here is the email shared last night:

lepage sots angry self

Neria,
I will not approve going to market until there is $60 MM in the Rainy Day Fund. I will not subject the state to further credit reduction. In the past the Treasurer would keep the Governor updated on cash expenditures, you have chosen not to.

Governor Paul R. LePage

A reminder: LePage accused Douglass last year in June of holding up issuance of the bonds, which was proven false and refused to sign them until the hospital debt was paid. On July 3, the governor shifted the blame for the bond issuance delay onto Democrats and in August, he applauded the Appropriations and Financial Affairs Committee for approving the bonds package that included $35M to higher education improvements such as Maine Maritime Academy in Castine and Maine Community College System.

In September, Maine Maritime Academy first broke ground on the ABS Center for Engineering, Science and Research- the first classroom facility built on campus in thirty years. From a press release:

“Enrollment at MMA has expanded from 650 to 950 full-time students over the last 15 years. During that time, there has been little expansion of educational facilities on our campus,” said Dr. William J. Brennan, President of Maine Maritime Academy. “The new facility is an investment in our students, in the technology necessary for the specialized education we provide, and in the industry-relevant research our faculty and students are immersed in here on campus.”

The new building will be a hub for joint student/faculty research projects, including low-emissions biofuels development and testing, wind turbine design, tidal and wave hydrokinetic devices, ocean studies research, and many other topics.

In January, construction began on the site:

mma castine abs

Maine Maritime Academy has begun construction of the first academic facility to be built on the college campus in 30 years: the ABS Center for Engineering, Science and Research. The construction process is estimated to be complete in 12 months, with occupancy planned for January, 2015. When complete, the 3-story, 30,000-square-foot building will provide state-of-the-art teaching and research laboratories, classrooms, student study spaces, faculty offices and workrooms in the heart of the campus.

In November, Maine voters approved $4.5 million in state funding to support the public-private partnership to build a new facility. The remainder of the funding needed to accomplish the estimated $14 million project is being raised through generous gifts, pledges and challenge grants from alumni, friends of the college, businesses and foundations.

“With the successful passage of the bond issue and ongoing fundraising efforts we are nearing our funding goals for the project,” said Maine Maritime Academy President, Dr. William J. Brennan. “We are also fortunate to have an experienced construction team from Nickerson & O’Day who are determined, even with the extreme weather since December, to stay on schedule.”

“We are very happy to have a chance to work with Maine Maritime Academy again,” said Karl Ward, President of Nickerson & O’Day, citing student housing construction and renovation projects the company has completed on campus over the past 20 years. “We’re also excited to be a part of advancing the college’s work in engineering and research.”

The new building will be home to renewable energy and ocean energy labs, as well as the new Marine Engine Testing and Emissions Laboratory (METEL), for which the U.S. Department of Transportation awarded the Academy $1.4 million to focus on research and development of emissions reductions technologies and engine efficiency technologies for marine and related power plants.

neria_headshot_web_smallEarlier today Maine Treasurer Neria R. Douglass shared a timeline of over 40 pages of compiled communications in a timeline from May of last year to present with the Appropriations and Financial Affairs Committee, detailing the emails between her department, the Governor’s office, and information on the various projects already in process.

View this document on Scribd

When contacted about the news of LePage’s refusal to issue the jobs bonds, Dr. William J. Brennan, President of Maine Maritime Academy, had the following reaction:

“We are not aware that this would affect the bond funding that was approved for Maine Maritime Academy. The State has given us the green light to begin construction on the ABS Center, and the project is underway.”

Bangor Daily News reports that there has been no response yet from the governor’s office:

LePage has said previously said that he would withhold up to $100 million in voter-approved bonds because of a bill passed recently by the Legislature that restores $40 million in revenue sharing to Maine towns and cities that was cut as part of the two-year budget passed by the Legislature last year. LePage proposed last year in his biennial budget bill to cut revenue sharing completely for two years, but the Legislature restored some of that funding over LePage’s objections.

Lawmakers also agreed to seek alternative revenue sources to restore the $40 million revenue-sharing cut in the budget. A task force could not agree on those measures, so Democrats on the budget-writing Appropriations Committee put forth an alternative plan.

That revenue-sharing bill, LD 1762, would take $21 million from the rainy day fund, which currently has about $60 million in it, as well as $4 million from a fund designed to accumulate budget surplus for the purpose of eventually reducing the state’s income tax and $15 million from surging unappropriated revenues. The bill, which had strong bipartisan support in the Legislature, is on LePage’s desk awaiting action.

Today Governor LePage issued a press release through the Maine Department of Labor, which read in part:

Revenue Forecast Flat for FY 2014 and 2015
Budget Balancing Challenges Remain

The Maine Revenue Forecasting Committee (RFC) met today to discuss the spring economic forecast due to the Governor and Legislature no later than March 1, 2014.

The RFC will formally submit its report next week; however, at the meeting today the committee publicly stated that General Fund revenue forecast would remain virtually unchanged since their last update in November 2013.


“Democrats on the Appropriations Committee were unwilling to wait on the Revenue Forecasting Committee’s forecast before casting their votes to raid the State’s limited rainy day reserve fund,”
said Governor Paul R. LePage. “They will now be forced with making tough choices to ensure the State replenishes the reserves to a balance of at least $60 million to try and avoid a bond rating downgrade this spring.”

Which is to say, LePage refuses to budge one iota.

Democrats were quick to point out to media that LePage and the 125th Legislature drew down from the state’s budget stabilization account themselves to cover budget shortfalls created by tax cuts to the rich:

Key Points:

· In 2011, the LePage administration and the Republican-led legislature drew down $27 million from the account to balance its budget, which included a $400 million income tax cut that primarily benefited the wealthy.

· Under the Democratic proposal, LD 1762, the budget stabilization account would simply return to similar levels as in 2012. The proposal temporarily draws down $21 million from the state’s budget stabilization fund often referred to as the “rainy day fund.” It later directs any year-end surplus to replenish the account.

· Democrats drew down funds from the state’s budget stabilization fund to ensure that the State could keep our commitment to Maine towns to help keep property taxes from spiking. The bipartisan bill to blunt municipal revenue sharing cuts prevented a 79 percent cut in the state’s obligation to our communities.

rainy day

(This story is still unfolding and will be updated as necessary.)

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