WHATS A STATE BOND ISSUE, AND HOW DOES IT WORK IN MAINE?
AS IT APPLIES to ballot questions, a bond issue comes about when the state puts a question before voters to ask about additional spending, typically to raise capital for specific projects or improvements. THE BOND is a loan to the state from private investors. BONDS ARE sold through the municipal securities market, where buyers include both institutional investors and individuals. Maine holds an annual bond sale, usually in May or June. Maine bonds are sold in yearly maturities, extending to 10 years. THE STATE PAYS principal and interest on the loan over a fixed period from the money it collects through taxes. The loan is known as a general obligation bond, meaning it’s secured by the full faith and credit of the state. These bonds must be retired within 10 years to open up future borrowing capacity and maintain favorable credit strength. IN MAINE, general obligation bonds must be approved by a two-thirds vote of the Legislature and the majority of voters. There are no constitutional
