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My first 2-year term as State Treasurer ends in January. I hope to have the opportunity to serve the people of Maine for another two years. In the meantime, my Treasury work will include several initiatives dealing with government spending, borrowing and debt, and their impact on our state economy and jobs. I’ll also continue to keep you informed as to how Maine state government spends your hard-earned tax dollars. Please share my Treasurer’s Blog with family, friends and co-workers, and click here to sign-up to receive them. Call Treasury at 624-7477 to schedule a time for me to speak to your group about Maine’s fiscal issues.
Have you ever wondered what it really means to approve a “Bond Issue” at the voting booth?
On November 6, Maine voters will be asked to approve, or not, four such items that will be listed on the ballot. As State Treasurer, it’s my job to prepare the Treasurer’s Statement which explains the financial impact to Maine taxpayers if they approve the bond issues. The Treasurer’s Statement is to be visibly posted in the polling stations throughout Maine on election day. Voters can also view it online at the websites of the Secretary of State and my Office of the State Treasurer.
Here’s the summary of what it means to Maine taxpayers to approve the four bond issues on November 6:
First, “bonding” is “borrowing.” The beginning language on the ballot for referendum Question 2, for example, reads “Do you favor an $11,300,000 bond issue to provide funds for…” That means, if approved, my Office may be instructed to borrow $11,300,000 for the stated purpose by selling Maine general obligation bonds to investors. These bonds are loans to the State. The annual interest and principal (“debt service”) payments to the bondholders will be funded by taxes paid by Maine citizens, businesses, and visitors.
Second, if approved by the voters, the $75,725,000 of total borrowing is projected to grow with interest payments to approximately $94,466,938 during the 10-year life of the bonds. Again, if approved, this money will be loaned to the State by selling bonds to investors, and must be repaid.
Third, the Treasurer’s Statement lists the annual interest and principal payments for the next ten years needed to pay off State general obligation bonds which have already been sold and must be repaid by Maine taxpayers. For example, during the current fiscal year July 1, 2012 – June 30, 2013, Maine taxpayers owe $120,406,400 of debt service payments to bondholders.
Fourth, the Treasurer’s Statement also states that, in addition to the above, there remains another $40,752,809 of authorized borrowing by past Legislatures and approved by voters which has not yet been borrowed (by selling bonds to investors).
I hope the above takes some of the mystery out of the borrowing process. It’s important for the hard-working Maine taxpayers to know how their tax dollars are being used.
Maine State Treasurer
(Mr. Poliquin's comments are as State Treasurer, not as a Trustee of the Maine Public Employees Retirement System.)
For related information and media, visit www.maine.gov/treasurer/outreach.