Former state economist and University of Southern Maine professor Charlie Colgan recently offered a dark assessment of Maine’s economic prospects over the next 18 months. The current recession stands to claim 17,000 Maine jobs by the third quarter of next year, and it won’t be until 2012 that the state’s employment returns to pre-recession levels.
“That’s the basic outlook of a year and a half of fairly steady downward motion in the employment picture for Maine, followed by a modest but slow recovery,” Colgan said. Particularly hard hit will be jobs in the retail, government and construction sectors.
As dire as the outlook seems and as difficult as things are likely to get in the months ahead, we see two potential bright spots — if Maine can muster the political will and use this crisis to address unmet needs that will position the state for long-term success in the 21st century.
The first opportunity lies in the federal economic recovery package, which could total nearly $800 billion over the next two years. Its broad outline is focused on spending to upgrade and repair America’s long-neglected infrastructure. That will mean money for education and public works, as well as aid to the states. It will mean money for transportation, energy and the environment, including alternative energy initiatives to lessen dependence on foreign oil and to address global warming. All of these investments are aimed at putting people back to work and restoring the nation’s economic health.
The second bright spot is this: Maine should enact its own statewide economic recovery package during this legislative session. A state economic recovery package should invest in projects that will benefit Maine for the rest of the 21st century. For example, state funds can be used to match federal initiatives or to do things that the federal dollars are not going to do or as “top up” money for projects that will not be getting quite enough from the federal package. One thing most economists agree on is that the greatest impediment to recovery lies in doing too little rather than too much.
For decades Maine has underfunded its infrastructure while the shape of its economy has undergone structural realignment. Much of that change has put significant strain on the state’s biennial budget.
Rather than passively accept this downturn in our economy, Maine should use it as an opportunity to do now what has to be done eventually — repair, rebuild and invest in our infrastructure. Just as the Obama administration has formulated a policy to put between 3 million and 4 million people back to work over the next two years, Maine should also set a goal for job creation, this time as a matter of state policy designed to work in tandem with a federal recovery package.
Accordingly, the Maine State Chamber of Commerce supports addressing critical needs in several areas of job creation and infrastructure improvement, including: Building weatherization and energy efficiency measures, including state and municipally owned buildings; transportation, including road and bridge repairs, as well as an upgrading of rail, airports and port facilities; water and wastewater treatment systems upgrades; education, not only upgrading substandard facilities, but supporting programs that make it possible for more people to further their education, thereby creating the work force necessary for the future; fiber-optic system extension into more rural parts of the state; transmission system upgrades to accommodate smart grid technology and expanded capacity for renewable power generation; continued R&D investments as recommended by the Maine Innovation Economy Advisory Board; and near-shore wind projects development, including adoption of a process to identify and permit areas in the Gulf of Maine within state jurisdiction suitable for wind farms.
Last, Maine must promote research in areas related to the long-term feasibility of offshore wind as a renewable source of energy here. We think particular attention is required to conduct siting studies for offshore wind farms, develop and maintain an adequate GIS and mapping base to support these studies, develop designs for offshore structures that are optimized for Gulf of Maine conditions, develop suitable composite materials for the above applications that can largely be manufactured by Maine industry, and last developing R&D partnerships with appropriate federal agencies, such as the Department of Energy, to accelerate the deployment of offshore wind in Maine.
We’ll be the first to acknowledge this as an ambitious agenda, but Maine’s cautious approach to public borrowing in the past now positions the state well for this type of long-term “big picture” approach. It takes money to stimulate an economy.
Years ago, the late Massachusetts Sen. Paul Tsongas campaigned with a banner behind him that read: “A sound economy is the engine that drives all social progress.” That sentiment now shapes our thinking.
James Atwell of Falmouth is chairman of the Maine State Chamber of Commerce’s board of directors. He may be reached by e-mail at email@example.com. Samuel Zaitlin of Biddeford is a former chair of the Chamber’s board and is currently chair of the Chamber’s strategic planning committee. He may be reached by e-mail at firstname.lastname@example.org.