Report lists strengths, weaknesses in Maine's economy

A report released Wednesday by a panel representing business, labor and government gives Maine's economy gold stars for health care and protecting forests, but also dishes out a few red flags where it says the economy needs improvement.

The Maine Economic Growth Council report rating 23 areas in the state's economy, communities and environment sends a mixed picture to Gov. John Baldacci and legislative leaders who were presented with copies in the State House.

Baldacci said his administration is addressing the weak areas and urged business leaders to support his proposals to make improvements.

"I think the report is another signal we've got to make changes," said the governor.

The report's authors see it as an outline to help the state set goals and chart its course over the long term. It was prepared by the nonprofit Maine Development Foundation, which was created by the Legislature nearly three decades ago to promote the state's economy. The report draws data from state and federal indexes.

It praises the state for having 89 percent of its population covered by health insurance, saying the 2005 figure exceeds the federal rate of 84 percent. A gold star was also awarded for managing a forest in which growth and harvests are balanced.

But the council handed out red flags, indicating a need for attention, in five areas. The report says research and development spending is lacking, manufacturing productivity lags behind the national figure, state and local taxes are too high, health care is too expensive and the highways and bridges are deficient.

On the last red-flag item, the report says Maine's roadways "are in considerably worse condition" than the rest of New England's. It says that "poor pavement has become a more pronounced issue in the last few years," resulting in higher operating costs, more crashes and higher reconstruction costs.

The report also lists other areas where the state has gained or lost ground on previously set benchmarks. For example, it says Maine lost ground on the goal of having the nation's 25th highest personal income by 2010. Instead, Maine's per capita income slipped to the nation's 37th highest in 2005, the lowest ranking in two decades.

But the state got a plus for growth in high-speed Internet subscribers. Maine's 42.4 percent increase between 2004 and 2005 beat the national rate of 32 percent.

Some areas, such as job growth, higher degree attainment and affordable housing, showed no movement either way.

Baldacci said the report presented a mixed picture and acknowledged that some areas are "troublesome."

"I'm not happy about the flatness in Maine's economy," Baldacci said. He stressed that his administration is addressing the weak points in its proposals before the Legislature that are aimed at easing taxes through school consolidation, modernizing MaineCare and merging state departments.

Baldacci called on the business community "to speak up and work with us" to pass his agenda.

"Silence is not an option. Everyone needs to participate," said Baldacci, whose message was echoed by House Speaker Glenn Cummings, D-Portland.

Senate President Beth Edmonds, D-Freeport, called the report "the single best tool Maine legislators have to address Maine's economy."

The 19-member Maine Economic Growth Council, established in 1993, has published 13 annual "Measures of Growth" editions.

On the Net:

Maine Economic Growth Council: http://www.mdf.org/megc/measures/MOG2007.html