The age of denial in Maine is over. A few months ago, it was considered heresy to even suggest that any of the state’s pulp and paper mills might close permanently. Then, in January, a stalwart of the northern Maine economy, Great Northern Paper Inc., declared bankruptcy idling for months its two mills in Millinocket and East Millinocket. A Canadian company has purchased the mills and, if all goes according to plan, will soon restart them, in a limited fashion using far fewer than the 1,200 employees who worked there until January. On Friday, there was even worse news for Old Town. Georgia-Pacific announced it would no longer make tissue and other paper products there. A pulping facility will remain operational – for now. Three hundred jobs were lost.

“Maine is on the edge of the cliff,” said James McNutt of the Center for Paper Business and Industry Studies in Atlanta. He was in town for an aptly timed conference on the future of the state’s pulp and paper industry sponsored by the University of Maine. It was a dour affair attended by industry experts, company executives and millworkers. Efforts are being made to stop, but pulling back from the precipice will take a work on many fronts, McNutt said. It is frequently said – because of the high cost of doing business here companies have not upgraded their facilities in Maine while investing heavily elsewhere – often in the South and foreign countries. Mills in Maine are among the most expensive to operate for any company.

So, when the time comes to cut corporate costs, the Maine mills are targeted. To stop from going over the cliff, this situation must change. State and local lawmakers must help through changes in tax policy and financial incentives. Fair or not, multinational corporations go where they can get the best deal. Maine’s business taxes must be restructured to encourage investments and costly upgrades. Communities can no longer expect mills to pay the vast majority of local property taxes.

This means individuals in mill towns will have to pay taxes similar to the rest of the state. State and federal policy-makers must also address the high cost of health care – a problem for all industries. Labor costs in Maine are among the highest in the country. This is because many Maine millworkers are middle-aged and near the top of the pay scale, but also because they are not as efficient as possible, according to Mr. McNutt. Workers and their unions must work with companies to address these issues, as they have already begun to do in some cases.

In the meantime, it would also be prudent for the state to continue to look for feasible alternatives to the pulp and paper industry for rural Maine. The precipice is steep and we don’t want to find out what’s at the bottom.