Maine must invest strategically in itself

Sunday, February 5, 2006

We are inundated constantly with surveys, studies and reports scrutinizing the economy, but one that has just come out contains vital information for Maine officials and lawmakers as they decide priorities, spending and potential borrowing this year.

The Maine Economic Growth Council's annual measures of growth, released Wednesday, shows disappointingly mixed results for the state's economy, with 11 indicators going up and nine down.

Among the most troubling information in the report, Maine has experienced a severe decrease in the amount of affordable housing.

The report shows that housing prices are skyrocketing across the state. What was once a problem limited largely to southern Maine now affects most of the state.

It has become difficult for many Mainers to find a house or an apartment they can afford in 15 of the state's 16 counties, according to the study. Only Aroostook County residents are not buried under housing costs that have grown beyond most people's reach.

Several themes from past years show up in this year's report. They include Maine's highest-in-the-nation tax burden, health-care costs that are prohibitively expensive and the fact that many Mainers must work two or more jobs to make ends meet

While the state has made significant strides to increase spending on scientific and industrial research and development, the report urges that more be done to bring better jobs to Maine -- which could also help decrease the number of people forced to hold multiple jobs.

While the number of people holding two or more jobs has declined, the state figure is still 30 percent above the national average. In 2004, 7.7 percent of Maine's workers held two or more jobs, compared to 5.4 percent nationally.

This not only suggests many people are not paid enough but it means thousands of Mainers have little nonwork time to spend with family, rest, get involved in other activities or pursue further education.

The report also raises a concern that, while not on most people's list of priorities, warrants attention: Maine continues to lag behind the New England and national averages in its number of students in master's or doctoral programs. The state ranks 50th in the nation in the number of mathematics and science graduate students -- a dubious position it has held for five years.

This is a concern because a lack of graduate students and professionals with postgraduate degrees can discourage employers, especially technical firms, from expanding in or moving to Maine.

This conflicts with Maine's efforts to increase research and development and to become a bigger player in the technical, postindustrial economy.

"There is every reason to be very concerned about the measure of higher degrees," said Laurie G. Lachance, the former state economist who is now president of the Maine Development Foundation, which oversees the Maine Economic Growth Council.

While these remain tough economic times for Maine, Lachance said the state must continue to invest in itself.

We agree.

The attention that continues to be placed on controlling taxes and spending is vital. Taxes in Maine are too high, making it an expensive place to live or run a business.

But it would be nearsighted for Gov. John E. Baldacci and members of the Legislature to think only about ways to slash spending and cut taxes. Instead, Maine needs to look for ways to spend smartly and strategically.

"We need to have sustained, continued investment in Maine," Lachance said. "It can't be a one-shot deal. It has to be over the long haul."

For Maine, being too restrictive or cautious with spending could be as detrimental as spending and borrowing as if there is no tomorrow.

Maine's leaders are responsible for implementing strategies that encourage not only survival but growth.

If the goal is to reduce taxes, money spent wisely in critical areas -- including education, research and development and affordable housing -- can actually do more than just cutting spending.

While we continue to urge fiscal responsibility and restraint in Augusta, Maine officials should intensify their efforts to attract employers, add jobs and boost workers' incomes.

Success in these areas could ultimately be the best way to reduce Maine's taxes.