Maine lacks long-term vision, expert says

BANGOR – Maine’s failure to develop a long-term economic development plan with a consistent, sustained strategy has limited the state’s success, a prominent Maine economist said Wednesday.

Laurie Lachance, a former state economist and now president of the Maine Development Foundation in Augusta, presented her research on the past 30 years of state efforts to attract business, expand thriving industries, increase per capita income and improve education and health care. Lachance, a 45-year-old Manchester resident, was invited to speak at a Bangor Region Chamber of Commerce breakfast at the Ramada Inn.

“What we need is for the business community and nonprofits to get together and hold the government’s feet to the fire,” Lachance said to the crowd of about 75 representatives from local businesses.

The Brookings Institution, a Washington, D.C., think tank, commissioned Lachance in 2006 to research the past 30 years of economic development initiatives in Maine and to identify successes, failures and missed opportunities. Lachance chose to find the answers through interviews with former governors, their chiefs of staff, development officials and representatives from almost every government department, educational branch and major business in the state.

“The Number One most common saying was our failure to articulate and stick to a long-term vision,” Lachance said.

Her research was added to the Brookings Institution’s own report on the state economy, “Charting Maine’s Future: An Action Plan for Promoting Sustainable Prosperity and Quality Places,” published in October.

Maine’s deeply held values of independence, self-reliance, frugality and humbleness mute investment and growth in the state, Lachance said. Those qualities, combined with pessimism, a result of the pain of lost jobs in the manufacturing industry, undermine the state’s ability to aggressively move ahead, she said.

“We need bold, visionary leaders,” Lachance said. “We have a proven record of innovative policies and development strategies.”

Among the most innovative ideas and wise investments the government has made in the past 30 years, Lachance said, were the creation of the Maine Community College System and the Maine Economic Growth Council, research and development efforts of the University of Maine and the Maine Technology Institute, the introduction of laptop computers in public schools, workers’ compensation and tax reform, and the passage of progressive environmental laws.

The state has failed to control the cost of doing business, which continues to rise due to state and local tax burdens and the cost of health insurance, Lachance said. State government has consistently under-funded its own economic development initiatives, especially in higher education, research and development, and transportation improvements, she said.

Moreover, the state tends to spread limited economic development resources too thin, Lachance said. The state boasts five federal agencies, five state agencies, 10 statewide entities, 11 regional organizations, 43 municipalities and 66 local chambers of commerce, all working toward similar economic development goals.

Lachance also diagnosed the state as suffering from “analysis paralysis,” noting at least 77 studies that have been published in the past 30 years to examine the same four things: tax reform, business climate, regional disparities and an east-west highway.

To back up the observations from her interviews, Lachance presented data from the 2007 Maine Economic Growth Council report, which was published in February.

She listed the state tax burden and reduced spending on higher education and research and development as significant concerns, compared to national and New England figures.

Maine’s tax burden, calculated as a percentage of income, was highest in the country in 2006 at 13.5 percent, almost 3 percent higher than the national and New England numbers, which tied at 10.6 percent, the report said.

State funding for higher education has dropped from nearly 18 percent of the General Fund in 1970 to almost 9 percent in 2005, according to the report.

Research and development spending represented 1.1 percent of the gross state product in 2002, while the same figure was 2.5 percent nationwide and 4.2 percent in New England.

Each statistic came with a goal for improvement. Lachance encouraged the audience to participate in the “Adopt-a-Benchmark” program, which the Maine Economic Growth Council has created to encourage statewide organizations and businesses to commit to an economic goal that is of particular importance to them.

For more information, visit the Maine Development Foundation Web site at www.mdf.org.