Legislators hear ideas from state business leaders

Posted Jan. 18, 2011, at 10:36 p.m.

AUGUSTA, Maine — Maine may show poorly in rankings of business-friendly states, companies may complain about regulations, and the state may have seen job losses month after month for several years.

But with a real economic development strategy, the state can redefine itself and move toward prosperity, one prominent Maine business leader told the Legislature’s newly formed Labor, Commerce, Research and Economic Development Committee on Tuesday.

The committee heard from three people in Maine’s business community: Peter Vigue, chairman of Cianbro Corp.; David Clough, state director for the National Federation of Independent Businesses; and Carol Coultas, editor of the biweekly publication Mainebiz.

Coultas and Clough mostly talked about where the state was, and general concerns among businesses around issues such as unpredictable regulations and the cost of energy and health care.

Clough said Maine expects to grow the labor force by 14,387 jobs from 2008 to 2018, while New Hampshire is expecting a 61,053 -job gain.

“Even if New Hampshire is overestimating, why can’t Maine do even half of what New Hampshire estimated?” said Clough.

He also noted some positive signs. Temporary labor companies he’s spoken with have said they are seeing increased demand, a leading indicator of a recovery. That recovery will come, in large part, from new and expanding small businesses, he said.

“The upside of a recession is somewhere in somebody’s basement, or somebody’s garage, the next gee-whiz company is being conceived,” said Clough. “That can be happening right here as well as anyplace else.”

Clough added that Maine businesses are in competition with other firms around the globe, and that the Legislature should bear that in mind when crafting new laws that would affect companies here. The flip side of that, said committee chairman Sen. Christopher Rector, R-Thomaston, is that Maine companies also are presented with some of the greatest opportunities they’ve ever seen.

“It doesn’t matter where you are, you can do business on a global scale,” said Rector. “It’s both a blessing and a curse.”

Vigue took a forward-looking approach to his presentation, pushing the need for the state to develop and pursue an economic strategy.

“If you think about it, for the last 10 years or more, we have focused primarily on re-creating the past — and we can’t do a thing about it,” said Vigue. “It’s incumbent on us to understand and look forward to the future.”

He drew a comparison between Maine and North Dakota. Both states are rural, cold, poor, relatively isolated and sparsely populated. In fact, North Dakota has roughly half Maine’s population. North Dakota has a number of abandoned communities, and Vigue said he saw the same thing in Maine as he toured the railways from Searsport to Fort Kent a year ago.

“It scared the dickens out of me,” said Vigue.

But North Dakota has turned itself around, said Vigue, and today it has a $1 billion surplus in state coffers and the lowest unemployment rate in the country, and has attracted companies including Microsoft, Bobcat, Case, New Holland and several leaders in wind power technology manufacturing.

“Can we do that here? I think we can,” said Vigue. “It’s a matter of mindset, defining who we want to be, and laying out a strategy.’

“I think what happened with that state is they redefined themselves and worked to understand what strengths they had and capitalized on those strengths.”

Vigue talked to the committee about a plan he had submitted to legislative leaders as a bill in the last session that did not make it to a committee, and generally got no traction. It addresses six key areas: home heating, energy, improving residents’ health, food production, business and investment attraction, and improving the transportation infrastructure.

Broadly speaking, the plan would look to weatherize all Maine homes within 20 years and convert the state’s heating and cooling systems to electricity-based technologies, rather than oil.

It would pursue federal grants to essentially make Maine an experimental site that explores ways to improve residents’ health, with an eye toward sharing those initiatives with other states. It would make use of Maine’s proximity to more than 40 percent of the country’s population, combined with the vast farmlands currently lying fallow here to make the state the “food basket of the Northeast.”

The plan calls for business attraction through the use of “payments in lieu of taxes,” essentially using those payments from companies to pay for their facilities.

“We get jobs in return, we get an expanded tax base from those people who are buying automobiles, building homes,” said Vigue.

The plan calls for the extension of Interstate 95 to the northern Maine border and the private development of an east-west highway, of which Vigue has long been a proponent.

And it calls for paying for the initiatives by leasing the median strip of I-95 and the Maine Turnpike to Bangor Hydro to run a utilities line from Canada to the rest of New England. The lease payments would finance a 50-year, $1.5 billion bond, said Vigue, “and we’re off to the Milky Way.”

Rep. John Tuttle of Sanford, the ranking Democrat on the committee, suggested lawmakers should look to reintroduce Vigue’s proposal as a bill in the current session.

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