Council charts Maine’s growth, raises some red flags

Posted June 16, 2011, at 9:30 p.m.

In 1993, then-Gov. John McKernan and the Maine Legislature established, by statute, the Maine Economic Growth Council. Developed to help shape a vision and set goals for the state’s economic growth, members of the council came from the private sector, public education, labor and nonprofit organizations. It also included members of the Legislature and the commissioner of the Department of Economic and Community Development. The hope was that goals would be identified in a nonpartisan manner. At that time, I was serving as commissioner of the DECD and was fortunate to be the first co-chair of the initial growth council with then-state Sen. Chellie Pingree.

Since that time, the growth council has issued 17 reports called “Measures of Growth.” The report establishes benchmarks and goals that measure Maine’s standing against other states and the nation in three components: the economy, community and the environment. “Measures of Growth” is the blueprint that provides a road map for state agencies, communities, nonprofits and private business as they work to advance Maine’s score through their own practices and procedures.

The 2011 report identifies 25 benchmarks for consideration. Of those only two were graded with a Gold Star for exceptional performance in Maine. The high national standing of Maine’s preservation of conservation lands earned the Gold Star as did the state’s success in international exports.

Unfortunately five benchmarks, or 20 percent, earned a Red Flag, indicating very low standing, requiring immediate improvement.

The first was for research and development expenditures, where Maine continues to fall behind the rest of New England and the nation. This component measures total R&D spending by Maine’s private sector as well as public institutions such as the university and nonprofit sector. However, the state’s focus is beginning to shift toward innovation and entrepreneurship for businesses. Maine must make this greater investment if we are to share in the next wave of economic growth.

The second area needing improvement is fourth-grade reading scores. While Maine is currently performing slightly better than the national average in this area, it is still a fundamental component of a promising future. Reading is crucial to individual and societal success and has a direct correlation to poverty, educational attainment and careers. If Maine is to have a skilled work force and knowledge-based economy, reading comprehension must be improved. The growth council’s goal is to have 50 percent of Maine students proficient in reading by 2015.

Maine also received low scores in wellness and prevention. The first step is to significantly reduce the instances of obesity and overweight adults and children. This condition often leads to chronic diseases. It also results in considerable strains on the economy. Strong efforts by schools and in the workplace are beginning to show positive results. Still, a more aggressive effort must be made if we are to reach the goal— a 50 percent decrease in overweight and obese adults by 2015.

The two remaining — and possibly most important — Red Flags were placed on Maine’s business climate. The cost of health care and the cost of doing business continue to be Maine’s Achilles’ heel. The cost of health care is of real concern for residents and businesses. We rank second in the country for the highest per capita expenditures in health care. There are many factors affecting the cost and there is no silver bullet cure. To become more competitive, more discussion and analysis aimed at developing a real solution are necessary.

The final red flag benchmark continues to be the cost of doing business in Maine. According to economy.com, the cost of doing business is 14.1 percent higher in Maine than the national average. This affects profits and increases the risk factors associated with creating or expanding a business in Maine. Certainly, reduction in taxes has helped, but the high cost of transportation and energy make Maine a challenge.

“Measures of Growth” is published and shared throughout Maine, and is available at www.mdf.org. While it points out the flawed sectors of our state’s economy, “Measures of Growth” also provides a vehicle for discussion and fosters the need for change.  Both of which can lead to positive remedies for improving our economic future.

Michael W. Aube is president of Eastern Maine Development Corp. in Bangor. He is a past commissioner of Maine’s Department of Economic and Community Development and former state director of Maine USDA Rural Development.

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