I recently attended the public hearings about Madison’s plan to risk $102 million dollars of property taxpayer money to build a natural gas pipeline for 12 towns in central Maine.

The cost of this $72 million project (there’s also $30 million in interest we’d have to pay on the borrowing) would put us near Madison’s legal debt limit, even though this project would benefit other communities up and down the Kennebec River. This debt also would effectively put a big new mortgage on all private property in Madison.

After learning about this project, other Madison residents and I formed Madison Taxpayers Against Bad Debt to inform our neighbors about the dangers of this project. We’ve requested and received financial support from Kennebec Valley Gas Company — which is also seeking to build a natural gas pipeline in this region — and we are actively reaching out to the community regarding our fear of burying the town in debt.

This debt poses real legal risks to each of us. Under Maine law, if Madison’s project founders, any or all of Madison’s privately owned real estate can be sold by the bond holders to pay off the bonds. My house, Backyard Farms, Madison Paper, or all of our private property could be sold.

Considering these perilous examples, I can’t understand why town officials are pushing so hard to take on all this debt to build this pipeline.

The town of Madison shouldn’t put itself solely financially at risk for an infrastructure project that will provide benefits for 12 towns — including six that are bigger than Madison. Why should one town take all the costs and risks associated with this venture, when so many more will get the rewards?

Nonprofit utilities (this would be one) aren’t allowed to make a profit, so this scheme has no upside, only downside for Madison. It isn’t necessary for Madison to take any part of these huge risks.

I agree we need to get a lower-cost energy source to Madison. Our businesses and our homeowners will benefit from natural gas. But a private company is a full year ahead of Madison in developing a similar project that doesn’t require any town to pay for it with debt. The private company invests its own money and borrows the rest itself. It already has initial PUC approval. Further, it is partnering with the towns along pipeline route by asking for tax increment financing, which asks all of the towns to pitch in by reducing pipeline property taxes equally, rather than by loading the burden solely on Madison residents.

The privately owned pipeline will bring gas to Madison at no risk to Madison taxpayers.

My concerns about this plan were made even worse when the city of Harrisburg, Pa., declared bankruptcy just a few hours before the first Madison public hearing because it had taken bad debt risk in a scheme a lot like this one. Harrisburg borrowed $125 million to renovate a trash incinerator that was expected to pay for itself by importing waste and selling electricity.

The revenue never showed up, the debt swelled to $310 million and the city had to declare bankruptcy. That’s the capital of Pennsylvania, in bankruptcy!

Harrisburg’s 49,528 citizens owe $310 million for the failed project. That creates a $6,000 obligation for every Harrisburg taxpayer, or $24,000 per family. Our small town of 4,855 citizens, less than one-tenth the population of Harrisburg, is trying to borrow more than half as much as Harrisburg borrowed.

That could create a legal obligation of about $21,000 for each Madison citizen, or about $84,000 for the typical Madison family. As a Madison property owner, those numbers scare me.

Anyone considering supporting Madison’s plan needs to think seriously about the possible consequences. If this pipeline hits ledge, makes mistakes or loses money, Madison’s going to have a financial disaster on its hands. Will we go bankrupt, like Harrisburg? Or will we need a bailout? Are residents and businesses going to end up with a massive extra tax bill? Could the lenders foreclose on our town hall? Or maybe even our homes and businesses?

Madison has had some real success in a difficult economy — we’ve kept our paper mill open and have welcomed Backyard Farms, a great new business.

We shouldn’t take this unnecessary step and imperil these businesses and our homes. There are much less risky ways to lower our energy costs.

Paul Fortin, of Madison, is a founder of Madison Taxpayers Against Bad Debt.


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