September 20, 2020

$25 million roads bond proposed Republican leaders prefer using surplus to borrowing

AUGUSTA – Gov. John Baldacci on Thursday proposed a $25 million general obligation bond issue, to go before voters in November, as the “first installment” of a plan to catch up on road and bridge projects.

Republican legislators were cool to the proposal, which may doom it, since a bond referendum must win two-thirds approval of both the House and Senate.

The bond is one of several recommendations made by a group appointed by Baldacci late last year to study what was then a $130 million shortfall for Department of Transportation road and bridge work. The shortfall was blamed on rising construction and petroleum costs and cash-flow problems associated with federal funding.

The bipartisan group, chaired by Sen. Dennis Damon, D-Trenton, who also heads the Legislature’s Transportation Committee, was able to whittle the shortfall to $90 million by finding expenses that would not be incurred as the list of likely projects shrunk, and by relying on “value engineering,” ways of building for less money.

The group also recommended securing $40 million through GARVEE bonds – grant anticipation revenue vehicle – which allows states to borrow money in anticipation of receiving federal road funds. And it recommended moving $15 million from the General Fund and $15 million from DOT personnel accounts to road and bridge work accounts.

The group’s report actually called for a $20 million general obligation bond, but DOT Commissioner David Cole said he and Baldacci believed the $25 million bond was a more realistic amount to seek.

Baldacci, flanked by members of the Transportation Committee, highlighted the safety of children on school buses and families commuting to work as a reason to support the bond. He also said roads and bridges are vital to the state’s economy.

“The highway projects that we will restore are not only critical to safety but will also be critical to economic development in Maine communities. The projects that will be built are the backbone of Maine business and industry,” he said.

Among many projects around the state that would be restored if the bond is passed, DOT officials highlighted a short list that included reconstruction of:

. A portion of Route 2A in Houlton.

. 15 miles of Route 2 from Newport to Bangor.

. A portion of Route 1 in Thomaston.

. A portion of Route 186 in Gouldsboro.

If the bond is approved, work could begin in mid-2007, Cole said.

Asked whether he would endorse the study group’s other recommendations, Baldacci would only say: “This is the first step of meeting that overall [funding] obligation.”

Legislative Republican leaders said the state would do better to use an anticipated surplus to close the gap rather than borrow.

Sen. Christine Savage, R-Union, a longtime member of the Transportation Committee, said the bond question would be more palatable to Republican legislators if it were offered as a stand-alone question rather than bundled with other bond requests.

Baldacci said the state was in a good position to borrow through bonds.

“As a state, we have authorized significantly less general obligation debt this biennium than at any time in recent history. Our debt-to-revenue ratio remains far below the conservative 5 percent guideline,” he said.

Rep. Doug Thomas, R-Ripley, wasn’t buying that argument.

“We need to fix our roads, we do,” he said. But debt also includes unfunded liabilities in retirement pension and insurance accounts, and facility construction obligations, Thomas said.

“We’ve got more than enough debt. We compromised last year with the understanding that there would be no bonds [this year],” he said.

Cole likened road and bridge work planning to a conveyor belt on which new projects are continually loaded. When the conveyor belt was turned off late last year, the projects began piling up. If the deferred work is put off until the next budget cycle, that will continue, he said.

“Our goal is the $90 million,” Cole said.

Other projects DOT said would be funded if the $25 million bond is approved include: Route 9 in Wells; Route 4 in Madrid; Twin Bridges in Turner and Leeds; Routes 9-126 in Monmouth; and Route 9 from Lisbon to Sabattus.

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