Before taking out loans, responsible individuals sit down and consider their finances. Likewise, legislators and voters should understand the state’s current financial obligations before approving more bonds.
Bonding involves borrowing money the state does not have, and Maine’s hardworking taxpayers must repay these loans.
One of this session’s contentious bills, LD 1378, proposed to force the executive branch to release the rest of the Land for Maine’s Future bonds. Since 1997, voters have approved $96 million in LMF bonds with almost $11.5 million not yet issued. Unissued bonds, like all bonds, have a constitutionally set expiration date. Mainers are still paying down $38 million in outstanding LMF bonds, and we have paid $16 million in interest. Customarily, the state’s treasurer sells bonds in June when interest rates are lowest.
During the legislative process, LD 1378 was greatly expanded to include all general obligation bonds, not just LMF bonds. The proposal failed.
Former Gov. John Baldacci said he would hate to see the governor’s power eroded, and I agree. It is not wise to eliminate the bonding authority of the executive branch. The final decision to sell bonds is the constitutional responsibility and fiduciary duty of the sitting governor, not the treasurer.
Maine’s governors and the experienced economists of the executive branch should be involved with the timing and issuance of bonds. The current bonding process satisfies the requirements of the Maine Constitution, the IRS, and the bond market, which helps keep our rates low and protects the taxpayers.
Rep. Heather Sirocki