Belfast could receive $400,000 grant frozen by governor

By Ben Holbrook | Jan 24, 2013

Belfast — Belfast could receive a $400,000 grant awarded to the city to construct the Harbor Walk if lawmakers agree to a proposal from the governor to borrow against future liquor sales revenue to pay off existing hospital debt.

The proposal is part of Gov. Paul LePage’s plan to pay off the existing $186 million in debt owed to Maine hospitals. As part of the deal, LePage agreed to release the $100 million in voter-approved bonds if the funding for the hospital debt is secured.

In a weekly address sent to media outlets, LePage outlined how borrowing against future liquor revenues will help the state.

“My plan pays our hospitals with revenues from liquor sales. It restructures the management of the liquor business, estimating upwards of $40 million annually will be generated from the liquor sales. It also provides consumers and retailers a better deal than today,” LePage said in his statement. “As part of this plan, the state will retain operational control over liquor sales starting in the summer of 2014 when the current 10-year private contract expires. That contract has cost Maine hundreds of millions, and my plan will return these revenues to the state.”

Belfast, which was awarded a $400,000 Communities for Maine’s Future grant to help pay for construction of the Harbor Walk, approved a revenue anticipation note in the amount of the grant after learning the funding was frozen.

A revenue anticipation note is a short-term municipal bond that is paid for using a revenue source other than taxes.

City Manager Joseph Slocum said the possibility of the bond's being released doesn’t have much benefit for the city, since the money has already been borrowed.

Slocum said the city spent an additional $14,000 to $20,000 in the process of seeking the revenue anticipation note, and the bond won’t cover those additional costs.

“It’s a real pain to Belfast taxpayers,” Slocum said.

Under LePage’s emergency legislation, the state would pay $186 million of the $484 million owed to Maine hospitals. The remaining balance is paid for by the federal government, which pays $1.70 for every $1 spent by the state.

Republican Journal reporter Ben Holbrook can be reached at 338-3333 or at

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