BUDGET COMMITTEE TAKES ON LIQUOR DEAL FINANCIALS

Posted: April 08, 2013 | Appropriations and Financial Affairs, Senator Hill, Veterans and Legal Affairs

Final payment to hospitals to move forward

 

AUGUSTA — Lawmakers on the state’s budget writing committee agreed today that they would take the lead on crafting the financial structure for the state’s liquor deal. The liquor revenue will be used for the state’s final payment owed on Maine’s hospital debt.

Maine’s hospitals have been paid $3.7 billion over the last decade. The hospitals will receive a final payment of $181 million from the liquor contract, triggering a federal fund match.

“Today we heard the non-partisan facts and figures behind the proposals to pay back the hospitals,” said Rep. Peggy Rotundo (D-Lewiston), the Appropriations House co-chair. “There is a broad bipartisan agreement on meeting that obligation and our committee will be working on those details.”

Non-partisan experts from the Legislature’s Office of Fiscal and Program Review (OFPR) briefed lawmakers from the Appropriations and Veterans and Legal Affairs (VLA) committees Monday morning on three financial structuring scenarios for the state’s liquor contract, which is up for renegotiation. OFPR provided analysis on the following scenarios:

  • state liquor contract to be run by the private sector and requires an upfront payment;
  • state liquor contract to be run by the private sector and requires revenue bond;
  • state liquor contract to be run by the state and requires revenue bond;

“It’s important that we get the best deal for the state’s liquor contract,” said Sen. Dawn Hill (D-York) the Appropriations Senate co-chair. “This is a tremendous asset for our state and we should keep an open mind as we move forward.”

Lawmakers on the Appropriations Committee will determine the best scenario on the structure the financial deal—an upfront payment or a revenue bond—and send its recommendation to the VLA committee. The committee is expected to continue its discussion with VLA and OFPR tomorrow afternoon.

The VLA committee will work on the bid structure of the liquor contract, including whether the contract will remain in private sector or return to state-control. The recommendations of both committees will be sent to the full Legislature in one bill.

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