Washington County voters on Tuesday rejected an $11 million bond meant to help dig out of a budget crisis, pushing Down East Maine to the brink of insolvency with next steps uncertain.
The no side of the unprecedented referendum made up 53.3% of votes while 46.8% were in favor when the Bangor Daily News and its national partner, Decision Desk HQ, called the race Wednesday morning.
Washington County is now on track to default on short-term loans in December and run out of money entirely by February.
The bond was the core aspect of commissioners’ broader rescue plan. They floated raising their budget going forward by 30% to cover the bond, causing outcry in one of the poorest and most conservative parts of Maine.
“The county commissioners will have to decide what we’re going to do,” Commissioner David Burns said Monday when asked about what would happen after a no vote. “We haven’t crossed that bridge yet, so we’ll regroup and do whatever is necessary.”
The crisis began with years of poor bookkeeping and mismanagement of funds. While some errors were discovered last year, the full scale of the crisis did not become clear until the county ran out of money this summer. To continue paying county employees, the county took on millions more in short-term loans.
The county’s longtime treasurer stepped down in September. Her office had been responsible for managing the books.
When cash reserves were drained, it approved the improper transfer of money from the county’s Unorganized Territory funds to cover general costs. Federal money from the American Rescue Plan Act was also spent, masking the extent of the budget crisis.
Since the bond was first pitched to a skeptical public, commissioners made several moves to appease voters frustrated with high taxes.
They promised to spend only $8 million of the bond to pay down loans due to Machias Savings Bank, offered towns a way to pay their portion of the debt off early and asked prosecutors to look into the county’s past use of funds.
Commissioners and other county officials, including Sen. Marianne Moore, R-Calais, made impassioned pleas for the bond. But tax discontent and backlash to the years of mismanagement led many voters to view the bond as a bailout for the county’s failures.
It’s unclear what will happen next. Maine law does not allow counties to declare bankruptcy or decline to provide mandated services.
Moore has submitted a bill that would allow cities and counties to declare bankruptcy, but legislative leaders declined to allow a bailout bill into consideration for the 2026 session.
Even if some remedy passes in Augusta, it could be months away with lawmakers not coming back until January. The vote throws a wrench into an already-fraught budget process. An advisory panel must approve a budget by Jan. 1 and was planning for the bond to pass.
Andrew Johnson, a 32-year-old Milbridge resident, voted against the bond. He hopes the county’s towns can band together to address the county’s budget woes.
“I don’t agree with getting more in debt to pay off debt,” he said. “I think we can find a better solution to pay off our debt.”
