Government should encourage improvements, they say

AUGUSTA — The complaints about Maine’s economy are familiar.

High health-care costs, high energy prices, inconsistent state regulations, high income taxes and an underfunded transportation system.

State officials, business owners and civic leaders gathered at an early morning meeting in Augusta on Wednesday to hear a presentation on the latest report aimed at crafting public policy that solves those problems and maximizes economic development.

Laurie Lachance, president and CEO of the Maine Development Foundation, and Dana Connors, president of the Maine State Chamber of Commerce, made a joint presentation of a report their organizations teamed up to draft, called “Making Maine Work.”

The groups hope the document, which is based on surveys by about 1,100 Maine businesses, provides a blueprint of priorities from Maine’s business community to the state’s next governor and Legislature.

The report highlights factors often cited as stifling economic development in the state: health care, energy, taxes and transportation highest among them.

But Lachance and Connors both said they hoped their work serves not only to highlight those issues, but show a path for lawmakers and state officials to work on improving circumstances.

“Government isn’t to blame for everything; their role is to encourage and enable a place where investment can happen,” Connors said. “Progress may have been had (on some of these issues) but we’re not quite there yet.”

Lachance said Maine’s demographics mean the state must get creative to increase worker productivity and per-capita income.

“We have to fully engage older workers and value every single person who lives in Maine,” she said. “We have to find a way to educate older workers. It’s got to be a strategy, though, that we live — not just give lip service to.”

Along those lines, communities also need to better encourage the integration of Maine’s immigrant populations in the work force through education and outreach.

“We have to help them help us grow,” she said.

The continuing loss of manufacturing jobs is still important in rural Maine, Lachance said.

“We can’t keep losing manufacturing,” she said.

The report also offered solutions to slow the growth of Maine’s spiraling health care costs.

In the 1990s, Maine’s health care costs as a percentage of gross domestic product were close to the national average. But by 2004, they amounted to 20 percent of Maine’s GDP while the national average was 13 percent.

“We’ve been on a different path,” Lachance said, adding that Maine’s goal should be to reduce annual growth in health care spending to below the national average every year.

Taking advantage of wellness programs, maximizing the state’s purchasing power and encouraging clinic visits rather than emergency care are would reduce costs, she said.

When it comes to high energy costs, the report recommends promoting a terminal for importing liquefied natural gas in Washington County, negotiating contracts with Canadian electricity suppliers and developing a new portfolio of energy sources, from biofuels to wind and tidal power.

Maine continues to rely too much on fossil fuels, she said: More than 80 percent of Maine homes are heated by oil and more than 85 percent of all freight is carried by trucks, she said. Maine’s electricity costs, meanwhile, are 60 percent higher than the national average.

“When those prices fluctuate, we feel it,” Lachance said.

Maine’s tax burden continues to be high, the report said — particularly the state income tax.
Lachance said concerns about state regulations aren’t necessarily that they are too strong, but rather they are inconsistent.

 “Don’t change the rules every time we turn around,” Lachance said of what business leaders had to say about state regulations.

She also said the state needs to change the culture of regulation and work harder to help bring people more efficiently through the regulatory process.

“Leadership really sets the tone on this,” she said.

Connors said the two groups teamed up for a report eight years ago for a similar purpose of setting priorities for new incoming leadership.

“We approach this not to condemn, but to construct,” he said.

Rebekah Metzler - 620-7016 - rmetzler@mainetoday.com