Gov. Paul LePage’s State of the State address Tuesday, his first since he won re-election in November, was long on talk about cutting taxes, but devoid of talk about the investments needed to move Maine forward. This is discouraging.
The governor didn’t mention education at all. Nor was there a mention of workforce training, investing in research and development or supporting entrepreneurs (other than by reducing their income taxes). Nothing about high-speed Internet or protecting Maine’s environment.
Maine lags most other states in measures of economic vibrancy, which does not bode well for the state now or in the future. The problems are clear. Maine’s workforce is aging and underskilled. This, not taxes, is a major reason businesses aren’t relocating to or expanding in Maine.
Utah, ranked the best state for business in 2014 by Forbes magazine, has become a tech hub with companies like EBay, Oracle and Adobe Systems expanding their operations in the state. A major reason is the state’s workforce. “The talent pool in Utah is incredible,” Scott Murray, eBay’s vice president of global customer experience, told the Associated Press in 2013. Utah has a workforce with technical know-how and foreign language skills, both of which appeal to companies like eBay, Murray said.
Forbes ranked Utah fourth for labor supply and 10th for growth prospects. Maine, which ranked 49th in the annual list, ranked 36th for labor supply and 48th for growth prospects.
Late last year, the BDN’s MaineFocus initiative tallied the significant economic development initiatives that had been proposed for Maine in the last two decades. These initiatives were then put to a public vote.
The November 2014 survey attracted 2,066 responses from the public, which narrowed the 20 initiatives to 10. The top priorities were reducing energy costs, expanding broadband, improving K-12 education, improving the state’s workforce and focusing on entrepreneurs and innovators. Comprehensive tax reform came in at number 12.
From the public’s top 10, 46 experts chose the five most important steps to get Maine’s economy moving: 1) Improve quality of Maine workforce; 2) Focus on entrepreneurs and innovators; 3) Improve K-12 education; 4) Reform higher education; and 5) Protect Maine’s quality of place.
LePage did not mention any of these Tuesday night. Instead, he touted reduced income taxes as the core to his path to prosperity. A 2013 study by the Economic Policy Institute found there was no meaningful correlation between tax levels and high-wage states. Rather, the strongest indicator of a state’s prosperity, as measured by wages, was a skilled workforce.
High-quality K-12 schools and colleges and universities draw and retain residents. So do sustained and targeted investments in R&D, which spin off private businesses that add jobs to local economies.
To be fair, the governor has included additional funding for K-12 education and the University of Maine System in his proposed budget; he just hasn’t emphasized it. He proposes an additional $5.3 million in research funding for the university system, but it would be dispersed over all campuses, with a focus on the five smaller ones. It would be better to target these funds to research areas that have a proven payoff. Through the Maine Technology Institute, the state has targeted seven agreed-upon sectors — including biotechnology, information technology and forestry — for research and development investments. By the way, Utah has done this too.
The slogan for LePage’s first term in office was “people before politics” (this term, it looks to be “prosperity, not poverty.”) LePage should return to that mantra and ensure the state is making the right investments in its people — through education and training, targeted and sustained investments in research and innovation — to move them and Maine toward prosperity.
