Under The Dome: Inside The Maine State House 9-13-13

Augusta, ME

Under the Dome: Inside the Maine State House is a regular update that provides a high-level overview of recent activity at the Maine State House. If you would like more specific information regarding an item in this newsletter or related to government relations, please contact a member of our Government Relations Practice Group: John Delahanty, Andrea C. Maker or Avery Day.

Order of Bonds on November’s Ballot Set

As a result of the special legislative session at the end of August, there will be five bond questions on the state-wide ballot on November 5th. The Secretary of State’s Office recently announced the order of these five ballot questions, which is:

  • Question 1: $14 million bond issue for National Guard capital spending
  • Question 2: $15.5 million bond issue for capital spending for the University of Maine System
  • Question 3: $100 million bond issue for transportation infrastructure
  • Question 4: $4.5 million bond issue for capital spending for the Maine Maritime Academy
  • Question 5: $15.5 million bond issue for capital spending for the Maine Community College System

Supporters of these bonds are now grappling with the psychology of the ballot, trying to determine what their placement on the ballot means as far as their chances of success. We can expect to see supporters of these bonds wage short campaigns between now and November 5th, as they only have a few short weeks to educate Maine voters on these ballot questions.

Hospitals Close to Getting Paid for Old MaineCare Debt

On September 3rd, the Governor’s Office reported that a bond to finance the state’s portion of the MaineCare debt owed to Maine hospitals was sold. The sale of this bond will result in over $484 million in state and federal matching funds going to Maine hospitals within weeks.

Legislation to authorize this sale was enacted this legislative session after considerable negotiations. In fact, this was one of the major legislative initiatives to emerge from Augusta this year. The ambitious proposal restructured Maine’s wholesale liquor contract and securitized the revenue stream from this contract to immediately pay off Maine’s hospital debt. This recently sold bond is the result of this complex proposal.

Tax Expenditure Review Task Force Set to Meet

The Tax Expenditure Review Task Force will hold its inaugural meeting on September 16th. This Task Force was created as part of the biennial budget. The President of the Senate and Speaker of the House have appointed twelve of the thirteen members of this Task Force in advance of this meeting (the thirteenth member is the Commissioner of the Department of Administrative and Financial Services or the Commissioner’s designee).

This Task Force is charged with evaluating the various tax exemptions and credits that are part of Maine’s tax code, also known as “tax expenditures.” This group’s focus is on tax expenditures designed to spur economic development and job growth. The Task Force is expected to develop a process to prioritize and evaluate tax expenditures and must also identify $40 million in budget savings through the repeal or reduction of specific tax expenditures. Businesses and industries that today benefit from the tax expenditures targeted for repeal or reduction will see an increase in their Maine tax burden. If this $40 million is not identified, a $40 million reduction to municipal revenue sharing will take place instead. The proceedings of this Task Force have the potential to affect a wide range of Maine businesses that rely on various State tax benefits.