MECEP Expresses Concern over Governor LePage’s Portrayal of Maine’s Pension and Debt Liability

Proposal to forego new bonds puts Maine’s economic recovery, global competitiveness and future prosperity at risk
Augusta, Maine (Thursday, February 10, 2011)—The Maine Center for Economic Policy (MECEP) expressed concern today at Governor Paul LePage’s bleak assessment of Maine’s pension and debt liability in his budget address to the Legislature.  MECEP also criticized the Governor’s announcement that he will oppose “bonds, borrowing or deferred payments of any kind” for the biennium ahead.  

“The Governor’s portrayal today of Maine’s debt and pension obligations does not accurately reflect our findings or those of Moody’s Investor Services and financial rating firms,” said Christopher St. John, MECEP Executive Director.  “And a two year moratorium on new bonds puts Maine’s economic recovery, global competitiveness and future prosperity at risk.  We urge Governor LePage to reconsider this stance and work with legislators and other interested parties to devise a targeted bond package to fund infrastructure and other investments that are essential sustained economic growth. MECEP will also carefully examine the actual budget document when it becomes available and will comment further once we have completed that analysis.”

MECEP cited the importance of bonds as a tool to leverage federal resources for roads and other infrastructure.  The organization also noted that the public has consistently supported bonds and that the decision to forego them thwarts the will of the people and makes no fiscal sense.

On January 26th, MECEP issued a statement on Maine’s debt and pension liability that quoted nationally renowned financial rating organization Moody’s Investor Services July 2010 assessment that “Maine continues its conservative approach to debt, with an aggressive payout structure and capacity to accommodate unforeseen borrowing needs.”
“Maine’s fiscal situation is considerably healthier [than California, New York, New Jersey and other states which face much more serious debt problems],” MECEP’s statement emphasized.  “Through prudent debt management, Maine has maintained exemplary credit ratings.  We are better-positioned than most states to address short and long range challenges and pursue investments that make the state more attractive to business, encourage economic growth, and create good jobs.”
See MECEP’s statement on Maine’s debt and pension liability: Building on a Solid Foundation: Maine’s Future Prosperity Demands Responsible, Fact-based Fiscal Management.

Earlier today, MECEP also released a background paper of facts on Maine’s budget challenges and urging Maine’s leaders “to consider all options and adopt a reasonable, balanced approach that preserves needed investments for roads, bridges, schools, health care and retiree security.” This report is People before Politics on MECEP’s website:   

For over 15 years, MECEP has provided expert analysis and advocated for fair, equitable state revenue and spending priorities that support working families, encourage economic growth and assure their opportunities for success.