Hello. This is Governor Paul LePage.
My fellow Mainers, you've been hearing a lot about different plans to pay the hospitals, and you might be confused. Well, let me set the record straight.
I've been a businessman for my entire professional career, and I've negotiated dozens of contracts for successful companies. If you don't understand finance and economics, these contracts can be confusing.
That's why my plan to pay the hospitals is so simple. But the Democrats' plan is difficult to understand. It's full of legal jargon, budget gimmicks and empty promises. It's nothing more than political posturing.
To create my plan, we spent six months digging into the state's budget, meeting with hospital administrators and consulting almost daily with officials at DHHS.
We audited the current liquor contract, and we relied on the expertise of our staff at the Bureau of Alcoholic Beverages and Lottery Operations.
The Democrats relied on career politicians to rush out their plan 30 minutes before I was scheduled to testify on my bill. Their last-minute plan consists of three talking points, and it ties together complex issues that have nothing to do with paying the hospitals.
Their plan even includes Medicaid expansion. But we haven't paid our hospitals the half-a-billion-dollars we owe them from our last expansion of welfare. How can we possibly expand Medicaid when we haven't paid our bills?
My plan is very simple. We will use a revenue bond of $186 million and federal matching funds of $298 million to pay off the $484 million we owe our 39 hospitals. My new liquor contract will keep millions of dollars a year in Maine, instead of sending the money out of state.
This new revenue from the liquor contract will be used to make the bond payments. There will be enough revenue left over each year to pay for clean water and transportation projects, along with setting aside money for our state's depleted rainy day fund. If you understand finance and economics, then you know that a healthy rainy day fund is essential for a good credit rating. Even better, my plan releases $105 million in bonds to immediately fund projects across Maine. My comprehensive plan would inject nearly $700 million into our economy. And we could pay the hospitals by June 1.
My plan has no risk to the taxpayer. It will create jobs, pay the hospitals, lower liquor prices for consumers and increase profit margins for Maine retailers. Better still, it will return millions of dollars a year to state coffers. I simply do not understand what the Democrats are trying to do. Their numbers don't add up. Instead of using lawyers to devise their scheme, the Democrats should have asked a fifth-grade student to check their math.
They expect bidders to shell out 200 million dollars upfront. Folks, that is a lot of money for any company to come up with. And folks, money ain't free.
Remember I said you need to understand finance and economics when making these contracts? Well, clearly, the Democrats do not understand the cost of money.
A private company would borrow 200 million dollars at much higher interest rates than we would with our revenue bond. This could cost up to 70 million dollars, depending on the interest rate.
How will the liquor contractor pay for this kind of loan-shark deal? And how will the contractor make a profit?
By taking money out of the liquor business. We will lose tens of millions of dollars that rightfully belongs to Maine.
In our plan, up to 500 million dollars will stay in Maine. That pays for many state projects, and it provides a lot of value to consumers, retailers and you, the Maine citizen.
No matter what you think of me, you know I understand business. So ask yourself, who do you trust? Democratic lawyers and career politicians with a last-minute plan, or a successful businessman who understands finance and economics?
Folks, I know a good deal when I see it. And I know a bad deal when I see it. The Democrats' deal is bad for the hospitals, bad for the liquor business and bad for you. So, please, don't be fooled by their tactics.
Let's pay the hospitals, let's get a better deal on the liquor contract, and let's put Mainers back to work. Let's get it done.