Small-business survey finds Maine failing

LEWISTON – Maine can’t sink much lower on a survey sponsored by the Small Business Survival Committee.

Maine ranked 49th this year on the so-called Small Business Survival Index, dropping from 48th the year before, according to the survey released Monday. Only Hawaii fared worse.

Maine’s poor showing was because of high income and property taxes, Workers’ Compensation costs and electricity rates.

The index uses 20 costs directly or indirectly linked to government – crime rate, minimum wage, the number of bureaucrats, taxes, for example – and grades states and the District of Columbia.

“These are some of the biggies in the index so that certainly positions Maine poorly,” study author Raymond J. Keating said.

Neither South Dakota, which topped the index, nor Nevada, which ranked second, have capital gains or income taxes, Keating said.

Hawaii, at least, has acknowledged the need to improve, Keating said. In the Pine Tree State, “I haven’t seen any real improvement in many key areas,” he said. “I haven’t seen a clear indication there’s recognition in Maine [that] policy needs to change.”

David Clough, state director of the National Federation of Independent Business, said the survey results came as no shock to small business owners in Maine.

“This stuff doesn’t surprise a lot of the small businesses that are here…,” he said. “Some small-business owners will tell you they’d rather be somewhere else.”

But Steve Levesque, commissioner of economic and community development, said the report did not present the entire story in Maine.

“It doesn’t tell us anything we didn’t already know. The issue for us is it doesn’t give us the complete picture,” Levesque said.

For example, the report took into account the heavy tax burden but didn’t take into account programs designed to ease the burden on businesses, he said.

If it did so, Maine would be in the middle of the pack for taxes instead of being at the top of the list, he said. “We think we’re pretty much in the middle of the pack. We’d like to be better than that,” he said.

The governor also is aware of the need to deal with high utility costs, health care costs and workers’ compensation insurance costs, Levesque said. State government is working to address those shortcomings, he said.