Economic growth report not great news for Maine

State economist Laurie Lachance (right) in 2003.
Linda Coan O'Kresik | BDN
State economist Laurie Lachance (right) in 2003. Buy Photo
Posted March 06, 2012, at 4:58 p.m.

AUGUSTA, Maine — In the 18th annual Measures of Growth report released Tuesday by the Maine Economic Growth Council, the state received gold stars for energy costs and international exports.

But Maine received red flags for health care costs, wellness and prevention, research and development, transportation infrastructure and 4th grade reading scores, and some of those areas have been red flags for many years.

Laurie LaChance, director of the Maine Development Foundation, the nonprofit organization that oversees the council, said the report looks at 25 specific indicators of economic growth but “no one indicator tells the whole story.”

John Butera, senior policy adviser to Gov. Paul LePage, called the report and its findings a “bold call to action.”

“This reinforces that Maine must continue to make tough decisions,” he said Tuesday as the report was formally released at the State House.

Every year, the council, whose 19 members are appointed by the governor, Senate president and House speaker, compares data in 25 areas. That data is then applied to specific benchmarks outlined by the council and a determination is made about whether there was movement toward the benchmark, away from it or whether there was no movement at all.

In the 2012 report, seven indicators moved away from benchmarks, five move toward their goals and 12 did not move substantially or at all. The results were largely the same as in last year’s study.

The latest report assigned gold stars to indicators that “exhibited exceptional performance in moving toward their benchmarks” and red flags to those that the council felt “need particular attention in order to improve.”

The gold stars went for exports, which were up 13 percent from 2010 to 2011, and for energy costs, as prices fell both in retail and industrial markets.

Butera, along with House Speaker Robert Nutting, R-Oakland, and Senate President Kevin Raye, R-Perry, pointed out that the report relies largely on data from 2009 and 2010 — before Republicans took control of the Legislature and the governor’s office.

Raye said the accomplishments of the 125th Legislature are only starting to materialize.

“I think what we’ve done will result in higher marks down the road,” he said.

Nutting agreed and highlighted the tax cuts included in the biennial budget passed last June that he said will spur economic growth.

Sen. Seth Goodall, D-Richmond, also served on the council.

“It’s important that we promote policy based on sound data that helps Mainers succeed — not ones that pick winners and losers. This report highlights the challenges of today as well as the need to prioritize our investments and policy decisions for the future.”

Among the areas for improvement were research and development expenditures and transportation infrastructure. Maine’s R&D expenditures as a percentage of gross domestic product was only 1 percent in 2008, the most recent data available. The goal is 3 percent, which would bring Maine in line with the national average. The New England average in 2007 was 4.7 percent.

Transportation infrastructure was a new indicator in the 2012 report, but the council gave it a red flag anyway.

Raye said those two categories suggest the need for a “modest” bond package that could go out to voters later this year.

In the past, governors and legislators have used the Measures of Growth report to help set policy. Sen. Chris Rector, R-Thomaston, who c0-chaired the economic growth council, said the report made it clear that lawmakers should improve in the areas of health care and education.

But the report’s value isn’t limited to elected officials. Tim Hussey of Hussey Seating Company co-chaired the council as a member of the business community.

“The information in this report keeps us focused on the big forces driving our economy,” he said. “Managing cost drivers like energy and health care while making investments in the Maine work force and the state’s innovative capacity will keep us competitive and successful into the future.”

The view the full report, visit bangordailynews.com.

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