Nonprofits pay the price over LePage decision
Gov. Paul LePage’s 2011 decision to effectively discontinue a bond program for nonprofits has left companies like MaineGeneral Medical Center with less financing options and more debt.
The Sun Journal reported LePage has not budged since he first refused to sign a pool bond package three years ago, preventing health care and education-based nonprofits from having access to low-interest bonds from the Maine Health and Higher Education Facilities Authority.
LePage’s decision in 2011 left eight colleges, hospitals and other nonprofits without the $31 million in financing they were expecting to receive, the newspaper noted. The financing would have provided the nonprofits loans with lower interest rates. No other governor had ever refused to sign a pool bond package since the program began 25 years ago.
The Sun Journal noted that MaineGeneral Medical Center is expected to spend an extra $42 million on a loan to build a 192-bed hospital in Augusta because it wasn't able to access financing with lower interest rates from the state’s pool bond program. If it had been able to obtain a state-issued bond, the interest rate for its borrowing package would have been 1% to 2% lower.
Robert Lenna, a former head of the Maine Bond Bank and Maine Health and Higher Education Facilities, told the Sun Journal the 20-year-old program had been very successful and helped nonprofits save millions of dollars. He said not one company had ever defaulted on a loan.
LePage's office did not respond to the newspaper’s request for comment on Friday. LePage said in 2011 that he refused to sign the bond package because it should require voters’ approval, according to the Sun Journal. He said he was concerned about Maine’s credit rating if a nonprofit failed to pay back its loan.
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