October 23, 2018
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Is Maine more ‘business friendly’ today under Gov. Paul LePage?

Ashley L. Conti | BDN
Ashley L. Conti | BDN
Gov. Paul LePage

AUGUSTA, Maine — When Republican Gov. Paul LePage entered office in 2011, he vowed to make Maine more friendly to business and create jobs — a central theme of his gubernatorial campaign.

LePage started with some high-profile gestures, such as having a mural celebrating organized labor removed from the Maine Department of Labor, which spurred national controversy, and placing an “Open for Business” sign on the Maine Turnpike in Kittery.

The governor also launched a “Red Tape Hotline,” audited state bureaucracy and solicited ideas from businesses on how state government could better serve Maine’s “job creators.”

And inside his Cabinet, LePage tried to reshape state government with private sector nominees at the agencies where business and government intersect: the Department of Environmental Protection and the Department of Economic and Community Development.

Darryl Brown, LePage’s choice to lead DEP, lasted three months before he was forced to resign over an apparent conflict of interest. At the DECD, commissioner and retired Texas Instruments executive Philip Congdon served four months before being forced out over racially charged statements he made in Aroostook County.

These early moves and missteps, however, preceded and obscured LePage’s more fundamental approach toward changing the relationship between Maine’s bureaucracy and the state’s business community. These efforts are easier to evaluate now, three years later.

During his term in office, LePage has leveraged his influence on state government to change its culture and structure and to spur business friendliness. For example, a person was designated at every state agency to act as a business liaison and help companies navigate regulatory systems.

Business consultants in Maine say those points of contact have made it easier to get answers from state government, although their core concerns remain in the private sector: securing financing, increasing sales and finding qualified workers.

Business and political observers interviewed by the Bangor Daily News also say the changes in state government under LePage are evident, but difficult to quantify.

This lack of data leaves LePage’s record on business friendliness a matter of perception and opinion, fueled by anecdotes and the methodology of assessments from self-appointed experts, including Forbes and its annual rankings, which regularly rank Maine worst in the country.

LePage’s record also become a focal point for this year’s gubernatorial election, with independent challenger Eliot Cutler this week blasting LePage for talking more than doing anything about job creation and LePage arguing in his most recent weekly radio address that he has steered Maine’s economy in the right direction despite “liberal” obstructionism.

In a recent interview, LePage said he felt his administration had been “moderately successful” in making the state more business-friendly, and chalked much of that up to businesses feeling comfortable dealing with a state government led by a fellow businessman.

“They come to a governor and tell him what they want to do, and the governor has been there and he understands,” said LePage, who is running for re-election.

DEP

Where the effect of LePage’s business-friendly approach is most evident is the Department of Environmental Protection, which has been led since June 2011 by Patricia Aho, an influential ex-lobbyist.

As with other state agencies, LePage’s directive to respond more ably to businesses has involved reorganization at the DEP. Before her tenure, Aho said, each bureau within the department had customer assistance staff, but they worked separately.

“They weren’t necessarily knowing what each other was doing,” Aho said. During one meeting, she said, two veteran customer assistance staff members who had been with the agency several years met for the first time.

Aho put that staff in a four-person Office of Innovation and Assistance, which aids “customers” such as businesses and municipalities through the regulatory process. The department also identified where it could simplify permitting and has expanded the use of “permit by rule,” shortening the time for certain low-impact projects to get approval.

More than 59 routine rules have gone through that new process since 2011, getting no secondary review from the Board of Environmental Protection, a citizen panel that oversees the agency. Department officials say it has made the process more responsive.

So do political players such as Ben Gilman, a lobbyist for the Maine State Chamber of Commerce, who said the LePage administration has brought a new tone to the DEP.

“A customer-client relationship is in place,” Gilman said. “I think that’s the biggest change.”

Not everyone agrees that these changes are good.

Ron Severance, former director of the DEP’s air quality program, said the new process reduces the influence of public comments. It’s part of a culture change that he said has compromised the department’s mission of environmental protection.

“They seem more to be willing to stay with the status quo of where we are as long as it doesn’t cost industry any money,” Severance said. “That seems to be a higher priority than it is to protect the environment.”

Pete Didisheim, director of advocacy for the Natural Resources Council of Maine, cited the department’s exemption of the Dragon Cement plant in Thomaston from state standards as an example of that departmental preference. Company officials said at the time that the state standard effectively limited the plant’s production and that the lesser federal standard was adequate.

Didisheim described the LePage effect as not culture change, but submission.

“I think the DEP has been the target of the governor and this administration for much of the last four years and I think it’s a pretty demoralized place right now,” he said.

When the DEP acts, controversy often follows. In May, the department nixed the inclusion of cancer-causing chemical formaldehyde in a rule that would have required manufacturers to disclose when it is contained in children’s products.

The stated reason was anticipation of a federal review of formaldehyde, but critics have called upon the DEP to take action and cited the influence of large formaldehyde manufacturers in stymieing regulation of the chemical.

Aho, nonetheless, contests any assertion that her DEP has compromised environmental protection, citing Maine’s continued membership in the Regional Greenhouse Gas Initiative and other proposals to control chemicals in consumer products as evidence.

“We haven’t necessarily loosened up any of the environmental regulations,” Aho said. “I think that’s a lovely myth that’s out there, and doesn’t actually mesh with the reality.”

DECD

The emphasis on “customer service” has become mantra at the Department of Economic and Community Development, where existing business assistance staff were renamed “governor’s account executives” and elevated to senior staff status. Those account executives report to LePage regularly — some as often as weekly — to discuss their work and the issues identified by businesses.

The DECD also created the Business Answers Program and the Red Tape Hotline as first points of contact for companies seeking to open or expand in Maine.

Brian Whitney, the department’s director of business development (and interim director of the Maine Technology Institute), said those two programs deal with 200 calls a month and each governor’s account executive has about 40 monthly interactions with businesses.

The governor also has designated a “business development liaison” in every state agency, which Whitney said has helped speed up communication between departments and companies in search of answers.

Beyond new titles and responsibilities, business officials say the changes are helpful, but don’t rid them of their foremost challenges.

“Their top issue is more often ‘How do I generate more sales?’” said Mark Delisle, state director of the Maine Small Business Development Centers, an agency funded by federal and state government that advises approximately 2,000 Maine businesses annually. “[Permitting] is usually not a go or no-go factor in someone starting a business, but it’s always good to make it easier and make it faster to get answers.”

Delisle said it’s hard to define a broad impact those changes have had for businesses in the state, largely because each business’s level of interaction with state, federal and local governments varied.

The implied promise of greater business friendliness boils down to jobs and overall economic growth. Headlines coming out of the governor’s office have sought to influence that narrative, detailing companies that have come here and plan to add jobs.

Whitney said he credits DECD account executives with bringing in businesses from other states, such as Montana-based fur hat manufacturer GlacierWare, South Carolina manufacturer Panolam Industries, as well as helping New York-based ReEnergy make the connections needed to restart its biomass plant in Ashland.

Yet Panolam and Glacierware also received tax incentives through the state’s Pine Tree Development Zone program, a flagship economic development policy not of LePage, but created by Democratic Gov. John Baldacci.

A preliminary cost-benefit study of Pine Tree Zones conducted earlier this year for DECD did not give it high marks, calling its tax incentives “very costly to the state of Maine.”

So, did it work?

The LePage administration didn’t set out specific job or growth goals. But at the DEP, LePage’s first commissioner, Darryl Brown, did enter office with a defined goal of cutting permitting times in half. That hasn’t happened.

Aho, Brown’s successor, said that’s not a bad thing.

In some cases, she said, permitting times are relatively long because a larger employer is opening or expanding and has proposed a complex project that takes longer to process.

Since 2010, the average number of days it takes to get a land-use permit from the agency is down about 14 percent from 2010 across three categories. The number of permits issued is also down over that period, about 7 percent. Both figures are on par with the early 2000s.

The plan submitted by Woodland Pulp in Baileyville, which is adding two tissue-making machines this year to its plant, received a prompt response. A DEP official said the project received a permit for those machines in 20 days, less than half the average duration in 2013.

That’s not everyone’s experience, however. Scott Gorneau, a Maine-based vice president at stormwater engineering firm FABCO Industries, said he still sees room for improvement at the DEP, particularly with how the agency approves new technologies.

In some cases, he said, his company has received approval in other states for a technology it determines is less expensive or better for managing stormwater, while full or conditional approval in Maine lags behind.

“That really hasn’t gotten any better for us,” said Gorneau, a past president of the Maine section of the American Society of Civil Engineers. “Maine is unique and is one of the most restrictive states to get [technologies] approved.”

While DEP’s goal is to be as responsive to the needs of its customers as possible, said Aho, there’s a balance of needs when it comes to environmental protection policy.

“By our nature, we’re to be slow, considered and thoughtful in our approach. But how that meshes now in this age we’re all living in, that we’re not even supposed to take five minutes before we respond to an email … it’s tough for our staff and the people we’re interacting with as well,” Aho said.

‘A long way to go’

There’s no certain way to assess the impact of the LePage administration’s signature campaign of business friendliness. And the economic indicators that are available don’t necessarily reflect outcomes that had anything to do with the Blaine House.

LePage has postured Maine as more business friendly, and used his position as chief executive to change the bureaucratic culture and structure in line with concerns — real and perceived — about its responsiveness.

Darryl Brown, former head of the DEP, said it was the agencies, not specific regulations, that needed to change.

“That was really a notion more than anything,” Brown said of perceptions that the DEP was unfriendly to business. “I think the department lacked leadership, frankly.”

For his part, LePage said more can be done. He still regularly speaks about the need to lower the state’s energy costs and has continued his push for right-to-work laws which would diminish unions’ power in the workplace.

With the election now just weeks away, the governor elected to change Maine’s attitude toward business could be judged on whether voters believe he succeeded. On that point, LePage is measured, but confident.

“I think there’s still a long way to go in my second term,” the governor said.

Follow Mario Moretto on Twitter at @riocarmine. Follow Darren Fishell on Twitter at @darrenfishell.

 


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