LePage declares five towns business-friendly; experts question economic strategy

AUGUSTA, Maine — Gov. Paul LePage declared five Maine towns business-friendly on Monday, though some experts said the program isn’t enough to counteract years of harmful policies and some of LePage’s other jobs initiatives, which they say are working against the governor’s own goals.

One economic development expert questioned whether efforts like these are effective when other initiatives by LePage can be perceived as pushing the state in the wrong direction. Another said it is too soon to gauge the administration’s effectiveness since LePage took office in January 2011. Yet another said no matter who is governor, it will take Maine time to dig itself out of years of poor policy decisions and an anti-business stigma hanging over the state that has fueled criticism by national publications such as Forbes Magazine, which has put Maine at the bottom of the list in the area of business friendliness.

Ed Cervone, interim president of the Maine Development Foundation, said when it comes to the effectiveness of LePage’s efforts, “the results aren’t in yet,” though he said recent work by LePage and the Legislature on cutting taxes and improving the regulatory environment undoubtedly will help. However, he said the state could do better on education and training opportunities ranging from early childhood programs to colleges and universities to employer-sponsored technical training.

“I think they’ve had some success,” said Cervone. “For any economic development agenda to work, there are some long-term strategies to look at that involve raising income, productivity and quality of life.”

Garrett Martin, executive director of a think tank called the Maine Center for Economic Policy, agreed that it is probably too soon to judge LePage on economic development, but said some of his actions in the past several months — such as budget cuts that harm education and social welfare programs and his veto of a research and development bond question that the Legislature had approved for the November ballot — are troubling.

“At this stage in the game, it’s clear that we are not doing as well as we should,” said Martin. “Maine was the only New England state to have negative job growth in 2011. Of course we’re looking at how we’re performing against the backdrop of a national and global economic slowdown.

“From my experience, I think this is exactly the time we should be doing some of the things that we aren’t, just like a business that plans for the future in down times as well as good times. What are the ways we might invest in our state and its people?”

Martin said LePage’s freeze of bond funds that voters authorized in 2009, as well as tax cuts enacted in the most recent legislative session while numerous government programs were cut back, will have destructive long-term effects on Maine’s economy.

“Instead of thinking about how can we invest in people to achieve a better set of outcomes, we are actually pursuing a path that is cutting the knees out from under a lot of working people,” he said. “The bottom line for me is that there needs to be better balance in the conversation we’re having about economic development.”

Dick Kelso, an administrator for the Economic Development Council of Maine, said he is supportive of LePage’s strategy, though he too is concerned about the governor’s stance against using the research and development bond.

“It takes a long time to make progress,” he said. “I think we’re going to see a lot of activity [out of the governor’s office] in the next two years, and maybe the next four years after that, which he’ll use to make some drastic changes. I don’t care what you do. You can give away millions of dollars if you want, but we’ve got to overcome this stigma. That doesn’t happen overnight. We had a Democrat-controlled Legislature for almost 40 years, and slowly things got eroded. Now, basically the situation is that we’ve got to pay for that and it’s going to be painful.”

Among the initiatives being worked by LePage is a program that recognizes Maine’s most business-friendly towns and cities, which is designed to highlight economic development activities being undertaken at the local level.

The municipalities of Pittsfield, Cumberland, Westbrook, Lewiston and Auburn on Monday became the second round of Maine communities named business friendly, according to a press release from the Maine Department of Economic and Community Development. They joined nine other communities that had earned the distinction earlier this year. The communities are awarded a certificate, a road sign produced by the Maine Department of Transportation, and exposure in state government-level business attraction activities. But according to DECD spokesman Doug Ray, the application process has proven as valuable to the designees as has winning the distinction.

“Just going through this exercise and seeing what a business or economic development specialist would think about your community’s process has been valuable for the towns involved,” said Ray, who indicated DECD typically helps applicants address things like government transparency and permitting processes. “Are we being as business friendly as possible? This can’t be done just at the state level.”

Dave Milan, director of economic development for the town of Bucksport, which was identified in the inaugural round of business-friendly communities, agreed.

“I found that working my way through the application was a really great experience of reflecting on what we have done and where we should be spending those precious few available hours in the day in order to make our processes more accountable,” said Milan in a press release.

Among the themes of business-friendly communities, according to data provided by DECD, are use of tax increment financing to lure new businesses, proximity to job-training programs and streamlined site-plan review and permitting processes. Many successful communities also have volunteer economic development committees, sometimes working with full-time economic development professionals hired by their municipalities.

DECD also is nearing the end of a months-long survey of businesses expected to wrap up before Labor Day. Ray said the department will compile those responses in the coming months with the intention of writing bills for the Legislature to review in its next session, which starts in January. Though he didn’t have specifics, Ray said those bills are likely to address access to working capital, workforce training and better health care options.

“It’s pretty clear that no matter where you go, that’s what businesses need,” he said.

And despite workforce figures that have remained essentially flat for Maine since 2008, according to state Department of Labor statistics, Ray said progress is being made. DECD is in negotiations with 19 different businesses looking to locate or expand in Maine, including one called Archer Machine, which last week closed on a building in Limington where it will manufacture precision parts for military vessels, power plants and wastewater systems. Ray said the business will employ five people immediately and has a goal of at least tripling that in the short term.

LePage, in a press release, congratulated the newest business-friendly towns.

“All of these communities are focused on creating a better environment for private-sector job growth and driving our economy forward by reducing red tape and being open for business,” he said.