- Associated Press - Friday, February 21, 2014

AUGUSTA, Maine (AP) - Maine Gov. Paul LePage and the state treasurer sparred Friday over the Republican governor’s announcement that he will not sign off on new bonds.

State Treasurer Neria Douglass said that the governor’s administration signed a financial order in July authorizing $69.7 million in funding for projects that would be paid back by selling bonds. But in an email to Douglass on Wednesday, LePage said he would not go to market with bonds until there is $60 million in the state’s rainy day fund. While already approved by voters, the issuing of bonds requires the governor’s authorization.

“I will not subject the state to further credit reduction,” LePage wrote according to a copy of the email provided to The Associated Press.

The rainy day fund currently stands at $59 million, but LePage’s administration says a Democratic bill that would take $21 million from the rainy day fund to give state aid to cities and towns will damage the state’s credit rating. The bill, overwhelmingly approved by the Democratic-controlled Legislature, awaits action by LePage.

Democratic lawmakers attacked LePage on Friday for withholding bonds, saying he was putting key investments at risk. Among projects the bonds are to fund are redevelopment for the Brunswick Naval Air Station, energy and infrastructure improvements at the University of Maine System schools and upgrades at health and dental clinics.

“He’s playing games with critical investments in construction projects like roads and bridges that will help Maine’s economy,” Assistant Majority Leader Jeff McCabe of Skowhegan said in a statement.

But LePage’s administration says going to market with the bonds right now would be financially irresponsible in light of a reduced rainy day fund.

“He will make the best decision for the people of Maine, and a (credit) downgrade obviously is not best of Mainers,” said Adrienne Bennett. “Holding off on the bonds would be.”

Democrats have dismissed the idea that the state’s bond credit rating would be compromised by dipping into the rainy day funding.

Last year, LePage withheld $104 million in already-authorized bonds until Democratic lawmakers passed legislation to address the $484 million hospital debt.

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