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LePage seconds Forbes calling Maine the worst state for business

Posted Dec. 19, 2012, at 11:18 a.m.
Last modified Dec. 19, 2012, at 7:35 p.m.

BANGOR, Maine — Forbes was right — Maine is the least business-friendly state in the country, Gov. Paul LePage said Wednesday.

“Frankly, I agree with them. I truly agree with them,” LePage said while delivering the keynote speech at a Bangor Region Chamber of Commerce breakfast.

If Puerto Rico is incorporated as the nation’s 51st state next year, Maine might end up dead last again, LePage said, drawing chuckles from the audience.

Forbes Magazine last week named Maine the worst state for business for the third year in a row. The magazine’s annual ranking put Utah at the top.

“And that’s after two years of struggling to make some changes to make Maine a more business-friendly state, so it just goes to show how much work we have to do,” LePage said.

The governor outlined what he believed to be the causes behind Maine’s dismal business climate, which largely matched Forbes’ reasons for why Maine was at the bottom of the barrel — high taxes, high energy costs and an aging population.

For LePage, energy costs are the main contributor to the state’s business woes. He said Maine residents pay 24 percent more than the national average for energy, while businesses are spending 14 percent more than businesses in the nation as a whole.

“Collectively, we are spending $212 million per year above the national average for electricity in the state of Maine,” LePage said, adding that energy costs need to be addressed now or the governor 40 years from now will be saying the same thing.

LePage cited the example of Barber Foods, which shut down its Portland processing plant in October 2011 after it was acquired by AdvancePierre Foods of Cincinnati. The company moved production to a plant in Oklahoma, where LePage said it is saving $500,000 per year on its bottom line because of Oklahoma’s lower energy costs.

“We cannot and will not have a prosperous economy until we have a prosperous business sector,” LePage said. “It’s that simple.”

The governor stressed the importance of “proven” hydroelectric power and natural gas in reducing the price of energy. He said he will continue to urge legislators to eliminate the 100-megawatt restriction placed on hydropower production in the state, and will continue to explore the possibility of purchasing cheap energy from Canada.

LePage has been critical of wind turbine projects, ethanol and other forms of alternative energy because of their subsidies and high cost of energy. He said he’s not against such technologies but that he can’t support them until the commercialization of their energy costs comes down.

“I just don’t want to pay more than 5 cents [per kilowatt-hour] for power,” he said.

“We have a lot of work to do,” LePage said. “But I am hoping that the Legislature will put aside their ideologies, both the progressive and conservative — put it all aside — roll up our sleeves and go to work.”

The governor also reiterated Maine’s commitment to repay its debts, especially to Maine’s hospitals, which still are owed $484 million in overdue Medicaid reimbursements.

“The state of Maine should not be using hospitals as our bankers,” LePage said.

LePage said that debt played a part in his decision in June not to allow several bonds, including some approved by voters, to be sold.

“It’s not because I’m holding anybody hostage,” LePage said. “It’s because the rating agencies told us, if you come to the bond market without having dealt with the hospital issue, we’re going to get hit hard on our credit rating. I’m trying to avoid us losing our credit rating.”

The governor criticized aspects of Maine’s education system, citing the statistic that there are 127 school superintendents for 186,000 students in the state. He compared that ratio to Florida’s, which has 57 superintendents for 2.7 million students. He said the structure was hurting students and teachers, and criticized superintendents who “double-dip” by accepting salaries on top of their pensions when they return to work after retirement.

“Our test scores have been stagnant for 20 years. We are being beat by many, many states,” and that is “embarrassing,” LePage said.

The governor also stressed the importance of training programs for skilled workers. He said the state needs to work with businesses, universities, community colleges and technical schools on programs that will draw students into good-paying jobs, such as machining.

He also called Maine “the most generous welfare state in the country.”

“That’s why we’re broke,” he said, adding that “the only way welfare’s going to be fixed is if you people in the audience pick up the phone, [call legislators] and say, ‘Fix it.’”

“Besides that, everything’s good in Augusta,” LePage said to close his speech.

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