Bureau/Division/Agency
Governor
Document Type
Sound
Exact Creation Date
2-19-2011
Duration
00:02:00
Language
English
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Rights Statement
No Copyright - United States. URI: http://rightsstatements.org/vocab/NoC-US/1.0/
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Description
Good Morning. This is Maine Governor Paul LePage.
$19,448! If you are one of Maine’s 653,000 tax filers, this is your share of the Maine’s $12.7 billion in public debt. If you do not remember approving nearly $13 billion in bonds, you did not necessarily miss an election. More than 95% of Maine’s debt was never approved by voters as required by our Constitution!
As a voter and taxpayer you have only had a say on about $500 million in general obligation bond questions on the ballot. The remainder of our taxpayer-backed obligations is the result of promises made, but never paid for and decisions made by quasi-governmental authorities you have never heard of.
That stops now.
$6.5 billion of our total debt, almost exactly half, are unfunded pension and health benefit liabilities owed state employees and school teachers. For years, promises about health benefits and retirement benefits have been made to public sector employees but not fully paid for by the Legislature.
The bills are starting to come due and they are enormous. Without reform, we have to set aside $449 million in the upcoming year to pay for pension liability. This accounts for 15% of General Fund Revenue.
I have introduced some sensible reforms as part of my budget that saves over half-a-billion dollars in retiree pension and health care obligation payments over the next two years. My plan also protects these programs for current and future public sector retirees. Without sensible reform today, Maine’s pension system will cease to exist in a few short years.
If approved, our budget reduces state indebtedness by $3.3 billion over the long term and makes it possible to increase support for local education, fund higher education without any cuts, provide an additional $90 million in support to Maine’s local governments and reduce taxes by $200 million.
Most of the remaining obligations backed up by Maine’s taxpayers were issued by boards or authorities you probably have never heard of. The debt was issued without your approval and passed onto other entities who we hope will repay the money. Here is an example.
The Maine Health and Higher Education Facilities Authority is an obscure, quasi-governmental body that has issued $1.4 billion in tax-exempt debt that has been used to fund hospital and college infrastructure projects.
Each of these projects may be worthy of support and the institutions borrowing the money have a strong record of repayment. But, ultimately, the taxpayers of Maine have a moral obligation to stand behind the debt.
A moral obligation can also be described as a co-signor of the bonds.
Article IX, Section 14 of Maine’s Constitution is clear. With very rare exceptions, the credit of the state shall not be directly or indirectly loaned without a two-thirds vote of the Legislature and a majority vote of electors.
I have made it clear to every agency that has been in the business of issuing obligations backed up by Maine’s taxpayers that I will not be authorizing any issuance of debt that is not directly approved by the voters.
I am willing to consider any project and work with anyone to find state-backed opportunities to finance worthy initiatives. But if the taxpayers are going to be directly or indirectly co-signing the loan, I am going to insist that the voters get their constitutionally mandated opportunity to offer approval at the polls.
Thank you for listening and enjoy your weekend.