MAINE’S COMING CRISIS

Plenty of Maine people who advocate for more state spending know that the last two decades of increases in the tax burden cannot be sustained. Yet they have not slowed their requests because no one in elected leadership has made the case, specifically or persuasively, for any group or individuals to give up some government subsides now in order to help themselves and the rest of the state even more later.

Maine’s tax burden is hardly the only, and may not even be the prime, reason for this state moving relentlessly toward economic failure. It doesn’t send enough students through four years of college, it doesn’t invest in research and development nearly enough and it is a decidedly rural state, with a rural road infrastructure, in a time when cities, suburbs and proximity to high-tech businesses are the hot places for growth.

But sticking way out at the high end for tax burden cannot add to its attractiveness. And at least as important, the growing tax burden is a warning sign: State government programs are relying on greater and greater portions of Maine incomes, suggesting the economy itself cannot meet the growing list of social demands, with a resulting increased strain on residents and businesses alike.

The effects can already be seen. Young people are leaving for more promising opportunities, population growth for most of the state was flat or fell throughout the last decade, manufacturing is fleeing and even a sharply increasing state budget cannot keep up with all the requests placed on it. This is not yet a time of crisis; it is four or six or eight years before a crisis, a last chance to do something meaningful before it is too late to act.

An impending collapse of Maine’s economy has inspired bookshelves of lengthy examinations of what is wrong and what must be done to fix it. The Institute for a Strong Maine Economy, with its report called “No Place to Hide,” released yesterday, joins the debate. Debate may be too strong a word because, although “No Place to Hide” is more comprehensive than most reports on the state’s economy, its conclusions agree with all the others: Restructure and reduce taxes, make government more efficient and tie its spending to economic growth, invest more in post-secondary education. All fine and all no doubt right and all certain to be attacked by supporters for various departments, agencies and groups that would see their share of tax dollars cut were any of this to happen in a significant way. There are some legitimate reasons for this response, and it is not entirely the supporters’ fault that they do not trust lawmakers with reforms to strengthen the economy and thereby bring in as much or more tax revenue than the current level. But Maine is in deep trouble as long as these conditions prevail.

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Any change from the downward spiral of a weakened economy and increased government reliance resulting in a larger tax burden and still weaker economy requires more than what all those economic reports can give. It may seem obvious, but without well-promoted goals and leadership to keep the state focused on those goals, the problems these reports so accurately describe will merely grow worse. Paula Valente, president of the Institute for a Strong Maine Economy, easily can list four valuable goals: a higher average income level for Maine, which currently ranks 35th nationally; a more diverse economy that better weathers downturns; a growing and more diverse population that returns vibrancy to Maine; and a capacity to provide services to older residents.

The other ideas usually talked about, all the tax-reform plans, economic-development conferences, investments in infrastructure, Gov. King’s proposals for growth, are the processes for getting there but they are not the goals themselves. This simple idea is often overlooked by lawmakers who regard, say, tax cuts as the goal rather than the means. If this latest report is going to be remembered beyond this week, it must be followed by a clear plan to identify what Maine people want – Ms. Valente offers a good beginning – and powerful and often-repeated arguments for what must be done to reach those goals.

Anyone who doubts this must happen should read the report’s key contribution, called Maine’s Investment Imperative by state economist Laurie Lachance. It describes in some detail what Maine must do to invest in itself and escape its current predicament. The points made in it lead to the conclusions of No Place to Hide listed above, but what is striking about them is the sacrifice that will be necessary. (Ms. Lachance succinctly puts it, “Failure to invest means failure, period.”) It will require the sort of effort that got Maine lawmakers to finally invest state funds in university research and development, only on a significantly larger scale.

No doubt a more efficient government would yield some savings that could be better invested elsewhere, but the majority of funding needed will either come from stopping the increases in the many worthy and important state programs and by raising money either from the federal government or from state taxes once again. This can happen only if political leaders acknowledge the pain necessary to make a profound change in Maine’s direction, rally popular support for worthwhile goals and campaign directly for them for years to come. A huge challenge. Yet there is no other reason to regularly mark Maine’s economic demise with yet more studies showing how far Maine has sunk.