Maine’s economy has stalled based on some key indicators in an annual report card released last Wednesday, and investments are needed in worker training, capital improvements, research and development and the state’s roads and bridges to get things moving.
The 13th annual report of the Maine Economic Growth Council found Maine has experienced little economic growth since the last report was published. It also noted the state’s per capita income fell to 37th nationally in 2005 – the lowest ranking in 20 years.
Prepared by the Maine Development Foundation, which is run by Laurie Lachance, former state economist, the report flagged five areas that need attention.
• Research and development expenditures have gone down.
• Worker productivity – a function of worker training and capital investment – is 28 percent behind the U.S. average.
• Maine’s roads and bridges are in considerably worse shape than the rest of the region’s.
• Health-care costs are higher in Maine, consuming 18.5 percent of gross domestic product compared to 13.4 percent nationally in 2005.
• High state and local taxes once again gave the state the No. 1 ranking in the country for tax burden as a percent of income in 2006.
The good news is a decline in international exports rebounded, hitting a new record of $2.6 billion in overseas sales in 2006. Forest products, as a whole, represent Maine’s largest export. Canada is the largest consumer of Maine products, followed by Malaysia.
Special recognition was given in the report to the state’s efforts to sustain its forestland and maintain growing stock. Maine forests cover nearly 90 percent of the state’s land.
And, as it has done in the past, the report highlighted the state’s high rate of health insurance coverage – 89 percent of Mainers have coverage compared to 84 percent nationwide. The report notes that employer-provided health insurance is declining here as elsewhere, but the gap is being filled by the state’s Medicaid program.
Gov. John Baldacci acknowledged the state received mixed reviews in the latest report, but said he is working on the problems.
“We know our economy is not yet where we want it to be. My administration is actively addressing these issues in an aggressive way,” Baldacci said. “That’s why my plan for real property tax relief and growing incomes for all Maine people is so important. We must reduce government spending – including consolidating school administrative units, modernizing MaineCare (Medicaid), and merging state departments. And we need to make the right investments for Maine’s future. These include investments in cluster development, R and D, higher education and workforce
development.”
Sen. Lynn Bromley, D-Cumberland County, who co-chaired the council’s report and also led a commission last year calling for substantial increases in research and development bonds, said, “The ‘Measures of Growth’ report proves what many of us have been saying all along. We need to invest in our state. We can not cut our way into prosperity, but prosperity is within our reach if we make a set of strategic and difficult choices and invest in proven strategies. As our economy grows, our tax burden will decline,” Bromley said.
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