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Maine's Upgraded Bond Rating Applauded
06/05/2014   Reported By: Mal Leary

There is a rare point of agreement among the three leading candidates for governor: They all agree that the bump up in the state's bond rating is good news. A few years ago, Moody's Investor Services lowered Maine's credit rating slightly by saying it had a negative outlook for its Double A-2 rating. For the bond sale scheduled for later this month, Moody's improved that status to a "stable outlook." And Gov. LePage says a further improvement could propel a major bond package from the administration. Mal Leary reports.

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 Duration:
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Gov. LePage touts some of the achievements under his leadership for the state's improved bond rating. And he believes the state can see a further increase to a triple-A rating because of his policies. And he says that will reduce the borrowing cost for his multi-year, multi-billion dollar plan to repair and improve Maine's infrastructure.

"In the next two years, three years, we'll take care of our infrastructure, our basic infrastructure of our roads, bridges, airports and our rail," LePage says. "And once we get that done than it is a matter of controlling the budget, being consistent in our budget and being consistent in our tax structure."

LePage says it will take about $2.2 billion to make all of the investments he believes are necessary to make Maine competitive with other states. He says he will propose that borrowing through state bonding in a second term if he is re-elected.

"I really want to fix the state, long term," LePage says. "Maine can and will become a major competitor for commerce in the country."

While Mike Michaud, the Democrat seeking the governorship, agrees the rating change is good for the state, he credits the Legislature with providing the budget stability sought by the rating agencies.

"They look at the stability within state government, whether or not they are meeting the demand, meeting the infrastructure needs. And this governor has done everything to prevent that from happening," Michaud says. "So I am very pleased the Legislature in a bipartisan manner was able to move forward, and therefore we were able to get that bump up."

And Michaud says the governor's new borrowing proposal seems a bit strange in the face of his opposition to bond packages over the last two legislative sessions.

"I find it kind of ironic that now he is focusing on infrastructure, where it was this governor that actually has refused to issue bonds that the voters have already approved," Michaud says. "That's election year rhetoric."

Michaud says there certainly is a need to invest in the state, but hasn't seen the specifics of the governor's plan.

Eliot Cutler, an independent in the race, says the way to set bonding priorities is through a long-term capital investment plan, just as a business would follow.

"We want to have smart and predictable borrowing," Cutler says, "not borrowing that is simply stimulated by the desire to get re-elected."

Cutler says the state should have been borrowing over the last several years, and taking advantage of the low interest rates that other states have enjoyed. He says rates will eventually go up and that LePage is proposing to borrow at higher rates in the future without accounting for how the bonds will be repaid.

"You know, it is about time we had a governor who is willing to level with the people of the state of Maine, that when you borrow money you've got to repay it, and you've got to have a stream of revenues to do it," Cutler says, "and he hasn't told us where he is going to find the money."

And both Cutler and Michaud say Maine's infrastructure needs go beyond roads and bridges. They say the state has a backlog of water and sewer projects, state univesity buildings in need of replacement and a real need for the fiber networks that can provide Mainers with access to the digital world.



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