Education, technology in place to build on
Copyright © 2002 Blethen Maine Newspapers Inc.
In recent years, Maine has made significant strides in preparing the people of the state and the state's infrastructure for the "New Economy," according to "No Place to Hide," a report from the Institute for a Strong Maine Economy. But, the report noted, when outsiders look at Maine and compare it to the other 49 states, there are still major problems and gaps that inhibit full economic growth in Maine.
Understanding both is critical to evaluating new initiatives. The question for the future is: "Does any proposed change in Maine's way of doing things build on and maintain the accomplishments and does it contribute to reducing the barriers to growth?"
If there is a "litmus test" for local, regional and state policies, it is found in that question.
Accomplishments are clear, according to the report. Maine has:
l The best primary education system in the United States, backed by Learning Results and a bold initiative in Learning Technologies;
l Improved access to higher education through a community college track that now serves 1,000 students, investments in the technical college system and the Governor's Training Initiative;
l An advanced telecommunications network with 110,000 miles of fiber optic cable and 100 percent digital switching;
l A 20-fold increase to $35 million annually in state support for research and development in the University of Maine system, biomedical research, marine technologies and the new industry-based Maine Technology Institute;
l An open electricity market and a large supply of natural gas through two new pipelines;
l Dramatic reduction in deficient arterial roads, implementation of a three-port strategy and reintroduction of passenger rail service.
On the other hand, national studies highlight deficiencies that must be addressed:
l Maine's per capita income has chronically lagged the national average by 12 percent to 15 percent, placing Maine 36th among the 50 states, according to the U.S. Census.
l For 2001, the Washington, D.C.,-based nonprofit Corporation for Enterprise Development gives Maine an overall grade of D for development. Maine received As and Bs in human resources (including K-12 education), but Fs in innovation assets (including both university and private research and development, science/engineering graduate students and patents issued).
l The same report for 2001 recognized relatively strong short-term employment growth and awarded an A for quality of life, including equity (i.e, Maine has one of the fairest tax systems across income groups); but Fs in natural capital, especially for high energy costs and rapid conversion of cropland to other uses.
l Latest census data rank Maine second among states in overall tax burden. Maine ranks 16th in state and local spending per capita, 7 percent above the median. Combined with relatively low incomes, this produces a high tax burden.
l The California-based Milken Institute determined that Maine made progress in research and development, but declined in exports as a percent of State Gross Product, and in doctoral scientists and engineers as a percent of the population. As a result, in 2001 it dropped Maine's ranking from 35th to 43rd in preparedness to succeed in the "new economy."
l In 2000 the "Cost of Doing Business Index," constructed by Regional Financial Associates in Pennsylvania indicated that the cost of doing business in Maine, driven by energy costs and tax burden, is 11 percent higher than the national average and 1 percent higher than New England's average.
l Productivity in manufacturing in Maine has tripled in 30 years, but total productivity of Maine's workers is 80 percent of the national average. Maine's exports stand at 60 percent of the national average. These statistics reflect the level of investment in productive capacity, not the work ethic of Maine people.
"In short," the report said, "Maine still has a long way to go to reach parity with the nation in income and economic well-being. Unless Maine continues to invest in productive capacity, reduces tax burden (both by reducing taxes and increasing incomes) and creates a stable business climate that welcomes investment, gains made in the recent past will falter, and the state's economic health will deteriorate."
With Maine's state government facing a potential $1 billion shortfall over the next biennium, decisions to maintain gains and initiate new efforts will determine whether Maine climbs up the rankings ladder or slips to even lower rungs.