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For Immediate Release

Date: 03/29/11

Rep. Waterhouse Bills Crack Down on Unapproved Bonds for Government Buildings

AUGUSTA - State Rep. Paul Waterhouse has introduced two bills that would block or sharply curb the ability of the Maine Governmental Facilities Authority (GFA) to borrow money.

LD 807, which has been referred to the Appropriations and Financial Affairs Committee, would completely eliminate the GFA's ability to issue bonds or negotiable securities beginning on October 1, 2011.

The second bill, LD 984, proposes to amend the Maine Constitution to require a two-thirds vote of both houses of the Legislature to authorize the GFA to issue a bond or security. That measure has been referred to the State and Local Government Committee.

LD 807, An Act to Repeal the Bonding Authority of the Maine Governmental Facilities Authority, is co-sponsored by the House and Senate chairs of the Appropriations panel, Rep. Pat Flood (R-Winthrop) and Sen. Richard Rosen (R-Hancock). It also enjoys the co-sponsorship of three other members of the Appropriations Committee: Rep. Kathy Chase (R-Wells), Rep. Tyler Clark (R-Easton) and Rep. Tom Winsor (R-Norway). Another co-sponsor is Rep. Phil Curtis (R-Madison), leader of the House Republican caucus.

LD 984 would pose the following question on the ballot: "Do you favor amending the Constitution of Maine to require 2/3 vote of both houses of the Legislature to authorize the issuance of a bond or security by the Maine Governmental Facilities Authority?"

"Most Mainers have never heard of the Governmental Facilities Authority, and they would be surprised to learn that they owe $189 million dollars to pay off its debt," said Rep. Waterhouse (R-Bridgton). "By the time that debt is paid off in 2030, including interest, the cost to Maine taxpayers is actually $241 million. In the next biennial budget, for fiscal years 2012 and 2013, the payment comes to $49 million."

The GFA was created by the Legislature in 1997 so that lawmakers could borrow money for government building projects without voter approval, as is required for normal bonds for such things as major road and bridge work, education and Land for Maine's Future. Freed from having to justify itself to the public, the GFA began piling on debt to build courthouses and other state-owned buildings. The $19.5 million outstanding debt of 1998 has now soared to 10 times that amount.

"This is what happens when the Legislature takes the public out of the bonding process," said Rep. Waterhouse. "They have saddled us with this enormous debt and $52 million in interest charges. Bonds that are not approved by the voters violate the state Constitution and need to be prohibited." ###

Contact:
Jay Finegan
Maine House Republicans
Tel: (207) 287-1445