FALMOUTH, Maine — Gubernatorial hopeful Steve Woods unveiled an economic strategy Tuesday that could result in the closure of more than 100 small Maine towns and redirect their state dollars — and potentially their residents — toward more urban centers.

Woods said the state now invests too much maintaining infrastructure to reach a widely dispersed population and it’s unsustainable. In his report, Woods states that 108 Maine towns receive five times as much in state and federal subsidies as they generate in local taxes and fees.

In short, the study contends the state’s “underlying problem” can be summed up as “more than 100 Maine communities that cost hundreds of millions of dollars a year to sustain while making very little contribution to the wealth and capacity of our state.”

While the theory behind Woods’ plan was substantiated, at least in part, by one of Maine’s best-known economists, the strategy didn’t sit well with the manager of Milo, the only small town cited in the report by name.

The study, titled “Maine Forward: 2020 Vision for Maine’s Economic Future,” is only 11 pages but was developed using data culled from thousands of pages of statewide municipal budgets going back at least a decade.

“I’ve realized as the chairman of the Yarmouth Town Council that governments are not commercial businesses, but some measure of business mathematics still applies,” Woods told the BDN on Tuesday. “If your expenses continue to exceed your revenues, you become insolvent. You can delay that by taking on debt, and you can mask it by seeking out more in grants and other subsidies. But I’ve found that there are 108 towns which — by no fault of the leaders there and by no fault of the people who have lived there, sometimes for generations — are basically insolvent.”

And those municipalities are drawing down state resources that could be used to make Maine’s urban centers — such as the Portland, Bangor and Lewiston areas, which already are home to 93 percent of new capital investments in the state, he said — more competitive on the global market.

Woods said the main thrust of his plan would be to level out tax disparities among municipalities around the state, meaning those communities he said are absorbing five times as much in state and federal subsidies as they’re generating in local tax revenues would begin to see less aid from Augusta.

In addition to cutting funding to those towns, he would seek to reduce the number of roads and highways — among other infrastructure obligations — the state is responsible for maintaining. Woods then would seek to support programs that would make it easy for residents in those targeted towns to pack up and move to more populated areas, perhaps through giveaways of publicly owned properties and tax waivers.

Woods declined to name the 108 towns he identified as underperformers, but used the 2,300-person Piscataquis County town of Milo as a case study in his report. Woods, who penned the report himself with the help of two research volunteers, wrote that while there are 377 jobs in the town, 576 residents receive state aid and 855 receive Social Security payments.

David Maynard, town manager of Milo, said Woods is “on the fringe of the fringes” with his new economic plan.

“As a town manager who has specialized in small towns all over the country … I’m very much aware that there is a portion of the American public who loves and cherishes small towns,” Maynard said. “I think it’s fair to say there’s a decent amount of people who would seriously resent a plan that would move their lives and businesses out of town. Not everybody wants to live in a city.”

Woods acknowledged Tuesday that giving the towns more infrastructure to pay for and less money to pay for it with, as well as encouraging mass relocations, could essentially create “ghost towns.”

“I don’t want to say, ‘Hey, I want to close down 108 towns,’” Woods said. “My plan is to give people in those towns more options.

“I’m not suggesting in any way we mandate people move,” he added. “You can have your 2-acre plot [in an underperforming rural town], but somebody in Lewiston-Auburn shouldn’t have to be subsidizing it.”

During a visit to Milo during the weekend, Woods wrote that he met a retiree who “lives a comfortable but by no means affluent life,” as well as two waitresses — an unwed mother in her mid-20s who is aspiring to qualify for subsidized housing and a 17-year-old who plans to move to Portland as soon as she graduates high school.

Those individuals, he suggested, represent drivers of the downward economic spirals he said are facing communities such as Milo. Young people, who are statistically more likely to be entrepreneurs and support education, relocate from the towns and leave behind mostly retired people or those who don’t have the means to leave.

“We are putting a disproportionate amount of resources into economic zones that are not performing,” he said. “We are giving just enough support to some of these places to suspend them in economic despair.”

Charles Colgan is chairman of the University of Southern Maine’s Muskie School of Public Service’s Community Planning and Development Program and is one of the state’s best-known economists. Colgan said on Tuesday he’s familiar with Woods’ plan and “I agree with him on parts and disagree with him on parts.”

“I think he’s right in the sense that most of the growth in Maine has been and will continue to be in the urban areas, and that does require a fair amount of attention toward how urban areas are going to grow and what resources that will take,” Colgan said. “Having said that, I don’t necessarily think the way to do that would be at the expense of the rural areas.”

Colgan said he believes the state’s rural outlying communities “have a lot of life left in them.”

“We’re going to face a point in the next 10 or 20 years where you’re looking at a group of very small towns with almost entirely elderly people in them, and we may have to make some decisions about how much in the way of resources we want to devote to those places,” the economist said. “But we tend not to say as a first order of business we’re going to abandon those places. I think we talk about maybe combining them and about how we’re going to serve them more efficiently.”

About 150,000 people combined live in the 108 towns Woods described Tuesday as “underperforming,” at an average population of less than 1,400 per municipality cited. That means more than 1.1 million Mainers would not be initially affected by the plan, Woods said.

“For every mile that you separate people from important services, like education and health care, you add resources and time,” he said. “Everything about the new economy — whether you’re talking about banking, labor, commerce or technology — is tied to speed and efficiency. The farther you go away [from urban hubs], the less speed and efficiency you have.”

In his document, Woods notes that the resource-based industries that motivated the dispersed settlement of Maine 100 or 200 years ago, such as timber harvesting and commercial fishing, have fallen on hard times, and the new science- and technology-driven economy depends on clusters of highly educated skilled workers.

In addition to his Yarmouth Town Council service, Woods is CEO of the Falmouth technology and marketing firm TideSmart Global, which lists powerful international clients such as the Lowe’s home improvement store chain, Walmart and digital camera maker Olympus.

Woods ran as an independent in 2012 for the U.S. Senate seat ultimately won by former Gov. Angus King and now he’s running as a Democrat for the Blaine House.

Incumbent Republican Gov. Paul LePage and independent Eliot Cutler also have registered as potential 2014 gubernatorial candidates with the Maine Ethics Commission, while Democratic 2nd District U.S. Rep. Mike Michaud and former Gov. and Rep. John Baldacci have said they are mulling runs for the job.

Democrat David Slagger and Alex Hammer, who is unenrolled, also have filed with the ethics commission.

The upcoming gubernatorial race could be crowded, but with his newly released — somewhat radical — economic platform, Woods is hoping to differentiate himself from many of the better-known candidates in the pack. For better or for worse.

“This is the ultimate inconvenient truth,” Woods said. “Every time I bring it up, people say, ‘You’re absolutely right, but people aren’t going to vote for you,’ or ‘People are going to be angry.’ I’m not trying to make people angry, but our elected officials should be expected to make decisions that are sometimes uncomfortable. There’s nobody in the political landscape who wants to do this, because in my opinion, it’s the hard path.”

Milo Town Manager Maynard had a warning for Woods and any other candidate who plans to reduce state aid to municipalities.

“Any candidate who thinks he can run roughshod over the rural part of Maine probably has another thing coming,” he said. “They vote in the cities, but if you stomp on the rural population, you’ll likely know it at the polls.”

Seth Koenig

Seth has nearly a decade of professional journalism experience and writes about the greater Portland region.