AUGUSTA – Maine needs to overhaul its tax system and ease its business regulations if its economy is to improve, according to a report by a group representing 200 professional economic developers.

The Economic Development Council of Maine’s report also encourages the state to create a community college system and promote affordable housing. “There’s been a lot of discussion in the past couple of years in the Legislature as to whether to get rid of certain programs or add programs,” said Richard Kelso of Economic Management Services, which acts as staff for the council.

“Nobody had taken a hard look at what Maine has to offer, what works and what doesn’t work,” said Kelso.

The council hopes to prompt debate and discussion on economic issues during this election year. Mainers will elect a new governor and Legislature in November.

The report calls Maine’s tax system a relic of an industrial age that survives in a service economy. It depends too heavily on taxes on property and business equipment, and is too volatile, the report says.

It also recommends that the state focus on supporting key up-and-coming industry sectors, such as environmental technology, biotechnology and financial services, while continuing to improve and maintain important existing sectors, such as tourism, papermaking and small business.

Maine also needs a process to review regulations periodically and eliminate those that do not perform as they should, according to the report.

A 1999 legislative task force looking at government regulations found it takes 17 licenses or permits to open a small convenience store and that 41 Maine offices in 10 state departments issue permits for 270 business activities.

The report also says Maine lags in the proportion of workers with college degrees, in income levels and income growth, and points to a correlation between income and educational achievement.