A debate: How to grow Maine's economy? (Portland, Bangor: sales, insurance)

[melinuxfool]

It's abundantly clear to me that the idea the state government has had to focus on a tourism economy is failing miserably for the local people.

Working three months out of the year just does not pay the bills during the other nine. I'm fortunate enough to have a job that pays a decent wage, but I realize many others are not.

What can we do as a state to better our economic situation?

I think we need a radical change in direction. I would like to see Augusta care more about Maine people than summer visitors.

Our closest competition, New Hampshire, has no sales or income taxes. The average income in NH is higher than Maine's. I think we would do well to model New Hampshire's economic policies here in Maine.

[Submariner]

While tourism is a big industry in Maine. I am not sure how much of Maine is really effected by out-of-state tourism. I do not live in a tourism 'hotspot'. About half of the properties in my township are accessed seasonally, the owners tend to be folks who live near Portland [rather than out-of-staters].

I recently attended a conference held by an economist who shared many interesting statistics with us. Among them:
1. Maine's population is old;

2. Maine's 'Demographic Winter' is upon us [*];

3. Maine's economy was growing steadily right up to the last quarter of 2001, since then it peaked and has seen a steady decline;

4. Slightly over 50% of all Mainer's personal income is from the public sector, less than half is from the private sector.

[*] Demographic Winter is when the birth rate drops to below self-sustainable numbers. For any culture to sustain itself it must have a birth rate of 2.6 The birth rate in the USA is 2.1, birth rates in all Western European nations range from 1.1 to 2.1 As a culture we are facing our own extinction because we refuse to breed. In the case of Maine, due to our aging population, females of breeding age are a very small minority. Maine has already reached the point beyond which there is no recovery. As a nation there is still a chance of recovery [though it would require a stoic breeding effort by most people of breeding age].

IMHO; before our economy could 'recover' we would require people of career age. We do not have enough of them at this stage.

May Divine Providence guide us.

[fxtrader]

I along with a lot of my friends and many other Mainers have had to move out of state for work. This has been going on for a many years and many of them return when they hit there retirement years. I hope I don't have to wait that long, but am scared that is what's going to happen.

[cebdark]

A lot of it, IMHO, has to do with "consumerism" in general.

I hope that I am seeing (and not imagining) that more people (nationally and locally) are paying attention to where things are made, grown, and sold.

Manufacturing needs to make a comeback IMHO. Of course, this will also depend on the nation as a whole, and tariffs have to be dealt with. Also, as much as we hate to hear the term "regulation" sensible regulation is needed to prevent fraud. "Pie in the sky" ideal I know.

If small business is to grow into bigger business, they have got to have more help in the form of at the very least not hindering them with endless paperwork and useless ideas. This is where I feel strongly that soliciting ideas from the very people who are running the businesses is a very good idea.

If Maine is to bring back a younger workforce, they will need to incent businesses beyond box stores to come up here. Let's face it, the cost of doing business (plowing, heating, electricity, fees, licenses, taxes, etc..) up here is pretty high. Who's really going to want to come here unless they have a reliable source of income (for example, retirees)?

[tcrackly]

Maine will have to somehow move back to a production economy from a service economy. The state will have to evaluate what physical resources we have, labor, forestry, water, agriculture, et al, and make an effort to encourage new products coming out of Maine destined to outside markets. I don't mean the knee-jerk tax cut to some big box package either. We will have to grow our economy from the ground up with fresh ideas coming out of local small business, agriculture, and college experimental research.
I really believe that taking advantage of our many resources to produce usable power is one of the keys...but not the gullible practice of contracting solely mono- technology enterprises like the standard wind turbine debacle.

[OutDoorNut]

Originally Posted by melinuxfool

Our closest competition, New Hampshire, has no sales or income taxes. The average income in NH is higher than Maine's. I think we would do well to model New Hampshire's economic policies here in Maine.

New Hampshire is terrific except that it doesn't have Maine's pristine Atlantic coast.

If there were a way New Hampshire could annex Maine, it would be the perfect state.

[melinuxfool]

Originally Posted by OutDoorNut

New Hampshire is terrific except that it doesn't have Maine's pristine Atlantic coast.

If there were a way New Hampshire could annex Maine, it would be the perfect state.

May not have the coast, but they have the white mountains.

[Zarathu]

To make the climate for business welcome, unfortunately will make the average everyday people who never ran a business in their life be upset. You have to have limited red tape for anything. Support for start-up businesses, both in the way of serious tax breaks, and limited taxes, limited regulations, and even public fund grants or loans, etc. You have to have the ability to pay bonuses.

Average every day guy and gal is going to be unhappy that some big shot corporate operations get such special breaks that they don't. But if you want new businesses to MOVE to Maine from elsewhere, remember that they have to pack up and move which is not cheap, so there has to be monetary incentives to do it. For the smaller business the same is needed.

Unfortunately we have a climate of hating people who make a lot of money. People get into business to make money, more money than they could make working for someone else at a set salary.

On this forum there has been a lot of railing toward the "fat cats" who move to Maine. But its these fat cats that have the money to launch new business, and to get the funding from Banks to make that happen. You can't tax and limit the fat cats and then expect that business will flourish.

If you want a Toyota Plant, they're gonna want some kind of sweetheart tax deal where thy pay no corporate taxes at all for the first 5 years.

You can't have it both ways. How many of you will accept special privileges for these fat cats, or for the small business next door to you, that you don't have an an individual person?

Z

[retiredtinbender]

If only it were as simple as tax breaks and TIFs for the idle filthy rich. (I agree though that the folks making the big bucks are looked on as something to hate.) Businesses are moving out of the country for a reason. IMHO that one (and only one) reason is the enormous amount of federal regulation. OSHA, DEP, EPA, Workmans' Comp, etc. Add onto that (sorry if it offends, but...) unions with more pay less hours, strike threats, and all that. When Sylvania the plant from Bangor to Monteray it all lo9oked good on paper as far as saving money. The guy that came up with the plan actually retired extremely well. Getting away from all the Federal and union stuff (at the very least) would actually save them money. Add to that the low cost of employing down below the border was a huge incentive. Six months later Sylvania high command was angry because of the rolling brown outs in Mexico. That's not good for someone doing a lot of welding. Then a year later they were upset that they could have headed to China and saved more money than moving to Mexico. And that included everything including building the road to the area to build the plant.

Remember back when Perot said pass NAFTA and you'll hear a loud sucking sound? Even as he spoke his teams were making plans to move a plant of his south to evade regulation. When Calif. was having trouble with brownouts they went to Mexico to ask to build a large power station. There regs were too stringent and their legislature wouldn't back down. BTW, Mexico told them all to perform a physically impossible act.

There are a lot more problems than taxes for bringing industry or small businesses into Maine. The problems from the MeDEP for just replacing or putting up a wharf to bring in your daily catch is enough to stop most people. Reign in the State and Fed as far as regulations would go a long way.

[Northern Maine Land Man]

Many nations and states have free trade zones. There you can run large scale distribution, import and export operations with very little encumbrances to efficient operation. Maine could have three at Portland, Searsport and Eastport. We could go much further than that with even greater economic benefit.

Maine needs free business zones. They would operate like free trade zones. There are thousands of laws, rules, regulations and impediments to doing business in Maine. What we need is for Augusta to get out of the way. Fully 52% of our state is virtually off limits to business. Fully 52% of our state is governed by seven unelected functionaries. Fully 52% of our state has oppressive regulations that prevent people from living their dreams. If somebody wants to search for a home fully 52% of our state is unavailable to a buyer in Realtor.com. After all, who in Pennsylvania is going to search for a property in "Unorganized Pis?"

It isn't just the Unorganized Territories. Maine has impediments to job creation in the other 48% of the state too. Potential employers are not allowed to shop for medical insurance where there are low cost policies. There are restrictive employment policies. There are very restrictive penalties on an owner if all the other restrictive policies force him to close down. I could write for a week on this.

That said, creative people can find a niche. The best opportunity in Maine is for an individual to be self employed. Two self employed people can work together on an occasional basis. I'm reminded of a state official who came to a farm and said, "This farm must be making good money to afford a hired hand."

The farmer replied, "Oh he ain't a hired hand. He works for me til his back wages add up to the worth of the place. Then I go to work for him."

(Wow. 2,000,000 people have read my stuff.)