Economy a historic state issue Candidates have similar stances on business climate and jobs

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It’s not unusual that the candidates for governor say they have a plan to boost the state’s economy. Going back in history, to the post-Civil War days, the theme of economic development has dominated gubernatorial races.

Through the years the aspirants’ pledges all have been about the same, according to Charles Colgan, a public policy professor at the University of Southern Maine. And Mainers have intently listened to similar promises to create new jobs with better wages in their neighborhoods.

“Economic development remains the most constant theme in the last century,” said Colgan, noting that he could have written the candidates’ policy stances because they follow what’s been said in the past. “You have to understand I’m a little jaded about this because I’ve seen it all before.”

This election season, the state’s economic environment is much like it was during the period that followed the Civil War – a few years of prosperity followed by a recession, Colgan said. Now add to that a projected budget shortfall of up to $1 billion for the first two years the new governor is in office.

Try as they may, Democrat John Baldacci, Green Independent Party hopeful Jonathan Carter, Republican Peter Cianchette and independent John Michael have campaigned from dawn to dark in restaurants, conference rooms and convention halls to show voters that they are not an exact copy of their partners on the ballot.

Yet their stances are relatively similar – eliminate the personal property tax that businesses pay on equipment and machinery, invest in research and development, and conduct an extensive overhaul of the tax structure so Maine appears more friendly to business. Right now, the state has the standing as having one of the worst business climates in the country.

If the tax structure is revamped and individual property taxes lowered, the candidates say they believe Mainers will have more money to spend at area businesses.

The contenders promise that special attention will be given to the two-thirds of the state that is experiencing economic hardship with the shutdowns of manufacturing plants and significant job losses at other businesses. Baldacci and Cianchette want to set up enterprise or empowerment zones, with tax breaks given to businesses that locate in the parts of the state where little economic development is taking place. Carter, however, believes the “whole state is an empowerment zone.”

Michael couldn’t be reached for his specific ideas on business and the economy.

The other three candidates seek to increase the amount of money spent to promote tourism because studies have shown that for every dollar spent on advertising Maine as “Vacationland,” the state receives about $14 in tax revenues.

The new governor also would change Maine’s negative reputation as a place to set up a business. The candidates want to earmark specific funds for business attraction purposes and not change those funding levels. In the past, little or no money has been spent on encouraging companies to locate in Maine. The hundreds of groups statewide that promote economic development in their areas will be streamlined to reduce costs and redundancies, but they still will retain their local flair, according to the candidates. Cianchette said the current economic development system is “fragmented, creates confusion and fails to use scarce resources efficiently.”

Two of the candidates want to increase the state’s amount of bonded indebtedness to support increased funding for research and development at Maine’s colleges and universities and private laboratories. Baldacci and Cianchette believe the bond debt could go up without affecting the state’s credit rating, and that would require voter approval, while Carter would rather have research and development efforts paid for out of the General Fund. Regardless of how it’s funded, Baldacci said, research and development facilities offer good-paying jobs. “I want to put the Golden Arches on these things and promote them as much as I can,” he said.

Baldacci, Cianchette and Carter each have particular planks they are promoting that their counterparts are not. Baldacci wants to create an international development district that would include the state, the Canadian Maritimes and Quebec. Together, they would promote trade development and economic growth.

Cianchette is pushing a plan to reduce taxes by 20 percent in five years, and cap state spending at three-fourths the percentage of personal income growth. If incomes rise 4 percent, state spending would go up only 3 percent, he said.

Carter said that because Maine is becoming a services-based economy, and moving away from a manufacturing-based one, he wants to tax professional “high-end” services such as work performed by attorneys and lobbyists. The 5 percent tax on such services would add $520 million to the state’s General Fund, he said.

Whatever his economic strategy, being governor is going to be the hardest job of the top vote-getter’s life. According to professor Colgan, whoever wins the Blaine House will need to introduce bold economic ideas on Day One – and not later – to prove he is serious about improving the economy. And he’ll need to understand that some or most of his ideas will not take hold until long after he’s out of office. The nation’s economy needs at least four years to recover from its current recession, he said, and Maine will need just as much time.

That’s how it usually is, said Colgan, who delivers a “state of Maine’s economy” speech every January.

“The irony is the vast bulk of what a governor can do in four years or eight years can only affect his predecessor and not the economy he’s in,” Colgan said. “[But] there’s still justification for doing the right things to get their economy on track … even though the payback is not in their administration.”

At the Institute for a Strong Maine Economy, a nonpartisan group that is an offshoot of the Maine State Chamber, director Paula Valente agreed with Colgan.

“There’s no question to me that this is a long-term effort, but clearly some progress needs to be made early on because of the budget crisis,” said Valente, whose institute is funded by most of the state’s biggest businesses. “Clearly the foundation needs to be laid out at the beginning of the new administration of how we progress” in the next four years.

One campaign insider, who acknowledges that the candidates are similar, sums up the election season this way: “It all comes down to whom do you want in there in tough economic times and in tough budget times.”

The resumes of the candidates show some hands-on business experience. Baldacci once was a restaurant manager, and has been involved in politics since 1978. He is about to exit the U.S. House of Representatives. If he loses the election, Baldacci said he would help his brother with the family’s restaurant, but also said he would like to become a teen counselor.

Baldacci boasts that more than 300 business people are backing his campaign, and his endorsements include the Maine Credit Union League and the Maine Association of Realtors.

Cianchette left his job as executive vice president of Pierce Atwood Consulting in Portland to run for governor. Previously, he was founder of Initial Staffing Services, and a former chief operating officer at Dragon Products Co. He was elected to the state House for two terms. If he loses, Cianchette said he would return to private business.

Endorsing Cianchette are the National Federation of Independent Businesses, the Maine Restaurant Association, Associated Builders and Contractors, Associated Constructors of Maine, and the Maine Forest Legacy, which represents the Maine Forest Products Council.

Carter is an educator who lists his occupation as executive director of the Forestry Ecology Network, and has unsuccessfully run for political office in the past. If he loses, he said he would go back to teaching.

Michael is self-employed as a petition drive organizer who also was a lecturer and fund-raiser. He has served off and on in the state House of Representatives since 1978.

On Nov. 5, the prize of being the state’s top chief executive officer will go to one of the four hopefuls, and Colgan said voters shouldn’t be surprised if the promises made during the campaign don’t materialize into concrete economic development strategies. The ideas will take on a different form once the Legislature, lobbyists and others tweak them. That’s just the way it’s been throughout Maine’s history, he said.

“Some things have been done, but not the things announced in the campaigns,” Colgan said.