Old News Archive

Candidate Libby Mitchell Shares Her Thoughts on Economic Development

July 27, 2010 - TRC - By (Text from website post)

Milo's Selectmen, Richard Mullins and Richard Banker; Milo's Town Manager, Jeffrey Gahagan; Piscataquis County Commissioners Tom Lizotte and Fred Trask meet with Gubernatorial candidate, Libby Mitchell.
A Philosophy of Economic Development — Investing in Maine people

Nothing matters more for Maine’s future than jobs.

But where will they come from ? Wall Street ? China ? Las Vegas ?

The reality is – most will come from those of us here in Maine today, people like you reading this website. Most of our future jobs are here in our brains. They are ideas ready to create a new small business. They are in small businesses that are ready to grow to the next step.

This is how most of Maine’s economic development happens. It’s fine to send out brochures around the country, and sometimes there’s a hit, like T-Mobile. But for most Maine towns, and most Maine people, the best hope of a future job is from the growth of the businesses we see around us today.

How does a business grow? It takes a skill of the workforce – and applies it to a new problem.

Guilford Industries used to be a textile manufacturer. When other textile mills closed, Guilford adapted. It opened up an entirely new market of cloth office dividers.

Kenway manufacturers in central Maine used to make industrial pipes and boats. Now Kenway is taking its skills and applying them to building wind power blades.

Cianbro began in 1949 building roads and bridges in Maine. Today it still builds roads and bridges but it also employs 600 people building floating platforms for offshore oil drilling in the Gulf of Mexico.

Bath Iron Works used to make wooden boats. They adapted to the industrial revolution in the late 1800s and turned to making iron and steel boats.

Sappi Paper takes pulp from one of its mills and makes, in its 100 year-old Westbrook mill, a paper product used to create a design on everything from soccer balls to Gucci jackets.

This is how economic development happens. Business parks, low interest loans, tax increment financing, tax breaks, all can help. But they don’t make jobs. People and their ideas, energy, and skills make jobs.

Government’s role in economic development is to help people realize their ideas and potential. Government doesn’t create jobs. Government creates the conditions that encourage and empower its citizens to create jobs.

It starts with education. Providing a quality education is government’s most important economic development activity.

It starts in first grade. Our young people need to be skilled at reading, writing, math, and computing. And they also need, from first grade on, to understand business. What is a business? How does an idea become a product? What is supply and demand? What makes a business succeed?

King Middle School in Portland is a model. A talented principal gives his teachers the time to plan “experiential learning” for their students—hands on, relevant, and challenging.

The educational role continues through college. We need students to learn how to make ideas real. That’s what Doug Hall does in his innovation program at the University of Maine. Doug is a graduate of the University of Maine, who went out in the world and established a world-wide reputation for helping businesses to innovate, and who has now come back to the University of Maine to teach us. Doug says that innovation should not be a major, but that 80 percent of students should graduate with innovation as a minor. That’s true for every higher education student in Maine.

Finally, we need to create a “lifelong learning” culture in Maine. Our existing workforce needs to keep going to school to learn new skills. Our state cannot compete economically by just educating young people; we need our entire population to upgrade in education and skills. Continuing education must become the norm in Maine, not the exception.

For all of these reasons, education is government’s number one economic development priority. Check out my issues page for additional ideas for how to improve education and workforce development in Maine.

Our second challenge is to maintain reasonable cost of doing business in Maine. Maine is rural, cold, with an old infrastructure. We are never going to be the least expensive place in the United States to do business. But we can do better.

The cost of doing business has four key elements:

* workers comp
* tax burden
* energy costs
* health costs

Let me discuss each one in turn.

In the early 1990s, our workers comp costs were among the highest in the country. I chaired a Committee that reformed Workers’ Compensation at that time. We took tough action. We created a successful “public option” – the Maine Employers Insurance Company, or MEMIC. Today Maine’s workers’ comp rates are around the national average[1].

In 2004, Maine had the fifth-highest tax burden in the country. By 2008, it dropped to 15th. This past year, while other states in the country increased taxes, we reduced our highest income tax rate from 8.5 percent to 6.9 percent. There is no more important state tax for small Maine businesses, most of which are “S companies,” and pay state income tax rates on their earnings. The Wall Street Journal editorial writers– of all people — called our achievement the “Maine Miracle.”[2] We are taking Maine in the right direction.

Energy costs are still high. But we took steps in the last two years to transform Maine’s energy picture. Fifteen wind power projects are now in development. Ocean-based wind power is coming. We are putting 4 times as many resources into weatherization next year. I have ideas for taking our energy development to a new level.

Health costs are the last unsolved problem. Dirigo tried to address this, but there is so much more to be done. Maine’s costs remain 20 percent over the national average. Health care costs are an economic development issue. Click here for more details on health care.

Our third challenge is to encourage innovation among our existing businesses. Maine is a leader nationally in composite materials, biomedical research, and disability insurance. We have a potential to lead in wind power and aquaculture. We need to continue to use the Maine Technology Institute, the University , the community colleges, our nonprofit research institutions, and our private colleges, to make innovation part of the daily practice of all Maine businesses.

So this is my view of economic development: It is about people. It is about education. It is about doing the fundamentals right. Maine has the potential to grow and prosper right now, right in our midst. We need to unleash our potential, and our future will be bright.

[1] Annual Report on the Status of the Maine Workers’ Compensation System, Submitted to the 124th Legislature, 2009, page ii.
[2] Editorial of June 24, 2009. See http://online.wsj.com/article/SB124571672694839297.html

NOTE - This article reflects the views of the author and not necessarily those of the TRC Alliance Team.