Maine Referendum Items 2 thru 5 on the 2012 ballot are all financial items. All the items listed have already been approved by the Maine legislature but require the ratification of Maine voters to become effective.
When reviewing the financial ballot items, keep in mind bonds are our government’s way of borrowing money. Your vote approving a bond means you are authorizing the State Treasurer to borrow money on behalf of the Maine taxpayers. Just like when you borrow money, interest must be paid on the money borrowed by the taxpayers. The current bond items total $75,725,000 but the amount to be paid back is $94,466,938 based on a 4.5% interest rate for the ten (10) years of the bond. All the bond debt on the upcoming ballot must be paid off within ten (10) years.
The current bond items will not be the only tax payer debt in Maine. There are already outstanding bond items in Maine. Each year the state is required to retire any bond debt that has been outstanding for ten (10) years; for example, debt in the principal amount of $102,330,000 must be paid off in 2013.
Just as individuals have credit scores, so does the State of Maine. A state’s bond rating is a reflection of a state’s credit worthiness; in other words, can the state afford to pay for the money it borrows? Just as a lower credit score means you will pay more interest to borrow money, a state with a lower bond rating will also pay more interest to borrow money. Maine’s bond rating as of May 2012 was Aa2 – third down from the best possible bond rating.
Referendum Item 2 asks whether or not Maine taxpayers agree to borrow $11,300,00 to fund selected higher education purchases. $7,800,000 is for the construction of a biosafety lab within the University of Maine system which includes an animal, a plant and an insect identification laboratory. $3,000,000 is for the Maine Community College System, a third of which is to be used for machine tool technology. The remaining funds, $500,000 is to be used for infrastructure and equipment at the Maine Maritime Academy.
Referendum Item 3 asks whether or not Maine taxpayers agree to borrow $5,000,000 for the purchase of land for conservation, outdoor recreation and the preservation of Maine farm land. The bond requires the $5,000,000 borrowed by Maine taxpayers to be matched by no less than the same amount from private and public contributions. The bond also states the protection of deer wintering areas are to be given preferential consideration when applications are made to receive funds made available through the passage of the bond.
Referendum Item 4 asks whether or not Maine taxpayers agree to borrow $51,500,000 to fund specific projects which are a part of the state’s transportation infrastructure. The passage of this bond will make the State of Maine eligible for $105,600,000 in federal and private matching funds. When you consider this item it is important to remember that eligibility does not guarantee receipt of the matching funds.
Referendum Item 5 asks whether or not Maine taxpayers agree to borrow $7,925,000 for drinking water systems and wastewater treatment facilities. $3,590,000 would be administered by the Department of Health and Human Services as a revolving loan fund for drinking water systems. $4,335,000 would be administered by the Department of Environmental Protection as a revolving loan fund for wastewater treatment facilities. The passage of this bond also makes the State of Maine eligible for federal grants.
All bond items are set out as separate items on the ballot allowing voters to make a separate decision for each financial referendum item.