Former state economist looks to the future

BANGOR – Maine is in a tough economic spot, but a former state economist Thursday recommended focusing on opportunities instead of panicking.

The global crisis could spur the state into making the kinds of decisions that ultimately could improve Maine’s quality of life, Laurie Lachance, president of the Maine Development Foundation, told those attending the Husson Business Breakfast.

“This pressure should give us the strength and courage we need to make choices that will set us towards a good economic future,” she said.

Lachance, who was the state economist for 11 years, gave area business leaders a long menu of more-or-less unappetizing statistics that show areas where Maine is struggling right now.

Among those are the continuing decline in auto and business supply sales, the sharp increase in the number of Mainers who receive food stamps and the fact that school expenditures have increased by more than 450 percent since 1978 while enrollment has dropped by 16 percent.

But the state’s statistics aren’t all gloomy, argued Lachance. Maine has been at or below the U.S. unemployment rate for 20 years, its financial institutions are strong and the economist’s “misery” index is still much lower than it was during the recession of the early 1990s.

“What do we really need to do as a state?” Lachance asked. “The number one thing we can do as a state is to invest in higher education. The goal is to make it as affordable and available to as many Mainers as possible.”

Lachance said that Maine historically has been among the last states in terms of research and development investment.

“One year we rated 51st, because they counted Puerto Rico,” she said. “We have to continue to invest in R&D. And we need to invest in basic infrastructure.”

Investments in education, research and infrastructure will pay off in the long run, said Lachance, along with finding a way to lower costs so that businesses can be competitive here.

Areas she recommended cutting back on spending include health care, which is how Maine spends 22 percent of its gross domestic product. This is partially due to its aging population, she said. Lachance also encouraged finding ways to spend less money on energy and education.

“Let’s be real in what we’re asking our schools to do. We’re asking them to provide counseling services, food services, transportation services,” she said. Lachance said school funding is an area where the state likely will have to make some tough choices.

Lachance said she finds it hopeful that there are many strong businesses in the state that have weathered adversity, such as L.L. Bean, Bath Iron Works and Getchell Bros. ice company.

“If Getchell Bros. and the ice industry can morph their way into the new economy, anyone can, I think,” she said.

She also looks at the increasing high-tech sector as a good sign, mentioning The Jackson Laboratory’s cutting-edge genetic research and the important strides in wood composites and paper industries that are being made at the University of Maine.

“We have to invest in ourselves,” she said. “We’ve got to trust our forward-thinkers.”