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  • Nobody Should be Working Full-Time and Still Live in Poverty

    Editorial by Mark Eves, the Maine Speaker of the House

    On Wednesday, May 11, I’m looking forward to joining the Baldacci family as they host a spaghetti supper in support of raising the minimum wage. The dinner, at $5 per person, will be held 5:30-7:30 p.m. at Cony High School, 60 Pierce Drive, in Augusta.

    The dinner is focused on why raising the minimum wage is so important for our state, and I want to take a minute to share why I’ll be supporting the minimum wage referendum on this year’s ballot.

    Like so many Mainers, my wife and I worry about how to make ends meet. We worry how we’ll balance our car payments and grocery bills with the hopes of sending our three kids to college and whether we’ll actually be able to care for our parents as they get older.

    And just like our neighbors, we’re willing to work hard to make up the gaps. Mainers don’t want things handed to us. We just want providing for our families and saving for our kids’ future to be a little less difficult.

    No Mainer should be working full time and still live in poverty.

    Yet that’s the reality for too many families that depend on a minimum wage salary.

    Despite rising costs for basic needs, our state’s minimum wage has remained at $7.50 an hour since 2009.

    Maine’s economic future depends on the strength of our workforce, the ability of our families to invest in their children, and the success of our businesses.

    Raising the minimum wage in Maine is a critically important and long overdue move, both for families struggling to get by on low wages and our lagging economy. By putting money back into the pockets of Mainers who will spend it in their communities we can jump start our businesses, help reduce poverty, and begin to keep pace with other states who continue to get ahead.

    In November voters will decide on a referendum that would raise Maine’s minimum wage from $7.50 to $9 an hour in 2017 and then a dollar a year until it reaches $12 an hour in 2020. Further increases would be tied to the cost of living, and the current subminimum wage for employees such as restaurant workers who receive tips would be phased out over a longer period of time.

    Almost 100,000 full-time workers in Maine would directly benefit from an increase in Maine’s minimum wage. Overall, 29 percent of all workers in our state would see an increase. And, more than 52,000 Maine children would benefit from one or both parents getting a raise.

    I’ve heard countless stories from Mainers, including parents like Katie Logue of Auburn, who work full time at low-wage jobs and struggle to afford the basic necessities that they need to provide for their families. Katie had to rely on food assistance and was even homeless despite working full time at a convenience store for $8 an hour.

    Beyond ensuring people like Katie are finally paid what they are worth, it’s the right thing to do to make sure every Mainer can bring a paycheck home that makes it possible to provide for their family.

    Raising the minimum wage is also the smart thing to do for Maine’s businesses statewide.

    Hundreds of business owners, such as Adam Lee, chairman of Lee Auto Malls, have already come out in support of raising Maine’s minimum wage.

    Adam was right when he said, “When working Mainers make a decent living, they spend that extra money in our communities. It is good for the whole economy, including my business. In the last year and a half, Lee Auto Mall has raised our starting wage from $9 to $10 and six months ago we raised it to $11 per hour. It is good for our employees and it is the right thing to do.”

    Maine desperately needs this economic growth at a time when our businesses continue to struggle with regional, national and international competition.

    This legislative session we raised wages for law enforcement officers serving on the front lines and mental health and direct-care workers who take care of our most vulnerable.

    Hard-working Maine families also deserve a raise.

    Raising Maine’s minimum wage is the right thing to do for our families, our businesses, and our economy.

    By Mark Eves, the Maine Speaker of the House

  • FocusMaine—aims to grow jobs and the economy using Maine’s identified strengths

    By Ramona du Houx

    More than 50 leading figures in Maine’s business, academic and political circles have become committed to ending the state’s economic stagnation. Their group, FocusMaine, aims to work with three promising industries in a concerted effort to grow 20,000 to 30,000 jobs over the next 10 years across the state.

    After FocusMaine concluded it’s first project, a $100,000 survey of Maine’s economic landscape by global research firm McKinsey & Co., the consortium announced the group’s objectives to the press.

    “We thought, ‘If we’re going to do this, let’s let the data drive the process and be the decision maker,’” said Mike Dubyak, chairman of the board of directors for WEX and its former president and CEO.

    “FocusMaine made it a core principle to identify three industries that offer the greatest potential to grow traded jobs in the state,” wrote Karen G. Mills is a senior advisor at the Harvard Business School, former administrator of the U.S. Small Business Administration and part of the leadership team of FocusMaine in an Op-ed in MaineBiz with Dubyak.

    The survey identified three key sectors where jobs would grow exponentially, raising incomes and the quality of life for all of Maine.

    Salmon in a DownEast hatchery. Photo by Ramona du Houx

    “Agriculture, aquaculture and biopharmaceuticals were chosen because Maine's inherent strengths in these sectors allow to us to compete nationally and even internationally in those growing markets,” wrote Mills in the MaineBiz Op-ed with Dubyak. 

    In aquaculture U.S. fish consumption has risen by 23 percent since 1990, and we import almost 90 percent of select fish products, most of which are farm raised. Maine has many small aquaculture operations; some who don’t want to get any bigger, while others do but they’ll need to build connections with businesses, gain advice and even get to know potential investors. FocusMaine could become the bridge that would connect Maine’s entrepreneurs with the expertise and people they need to know.

    The same could be said for the agriculture sector that has had an influx of young organic famers, but lack connections that could help their operations flourish. The number of farmers aged 34 and younger grew by nearly 40 percent from 2007 to 2012, during the same time there was an increase in 1,326 agricultural jobs—during the recession, while other jobs declined.

    There has been 10 percent annual growth in pharmaceutical contract research and manufacturing from 2005 to 2011 in Maine. As a strong biopharmaceutical cluster in Massachusetts continues to expand and their Boston based will need more affordable locations for manufacturing, and Maine fits the bill.

    Dubyak has been avidly working with Pierce Atwood partner Andrea Cianchette-Maker, co-chairwoman of the FocusMaine leadership team with Dubyak to develop Focus Maine, which has dozens of banks, policy-people, business and education leaders on board with the objective to grow Maine’s economy. FocusMaine’s mission is to be a catalyst to accelerate growth, helping insure that companies large and small in these three industries have the resources to grow, compete and create jobs.

    “We have to develop the high priority strategies and which of those would require or benefit from government support,” said Cianchette-Maker.

    Hence there are teams focused on political, academic and research aspects of developing the 10-year plan. Its government advisory group includes former Gov. John Baldacci and former Gov. John McKernan.

    “I'm very proud to be part of this first class team of job creators. The focus isn't trying to be everything to everybody. We’ll take a few key sectors and become the world's best in those fields — agriculture, aquaculture and the life sciences manufacturing. I believe with more jobs in these sectors it will create a picture that ties all Maine together,” said Former Governor John E. Baldacci.

    The principle leaders of FocusMaine have built smaller organizations into larger ones. Hence they are turning their skills to smaller businesses with the potential to expand. The list of over 50 leading Maine figures on FocuMaine’s website speaks volumes about the seriousness of the group.

    “What it will take is a sustained, collaborative effort, which we know is possible. It will require business leaders, government, educators, labor, foundations, entrepreneurs and many others in our community to all come to the table and work together. The result will be more good-paying jobs and greater opportunities for people all across our state,” wrote Mills in the MaineBiz Op-ed with Dubyak. 

    Before Mills worked for the Obama administration she was put in charge of Baldacci’s efforts to boost Maine’s economy by working with lawmakers, stakeholders and researchers focusing on growing cluster areas identified as having potential. She successful helped kick start the Maine Technology Institute (MTI) grant program—Cluster Initiative Program (CIP) for collaborative projects that boost Maine’s high-potential technology-intensive clusters. FocusME received a CIP grant with the Gulf of Maine Research Institute.

    FocusMaine intends to concentrate on aquaculture first, funded in part through that $100,000 MTI grant. FocusMaine, has already raised about $700,000 in grants and contributions from at least 20 Maine companies and nonprofits.

    There are key reasons why FocusMaine has trade sector jobs in their sights—

    Traded sector jobs on average pay an average $50,400 annually, nearly double the average job in the state. In the trade sector, employees tend to stay longer in the company, then workers in lower paying jobs do. Good paying jobs will help keep young educated Maine workers in the state, too often they leave because of lack of employment opportunities.

    The ripple effect from a worker who spends his earnings in his community helps to support 1.6 additional local jobs. 

    “We believe that with a focused effort in these three sectors, over the next 10 years we can create an additional 8,000 to 10,000 traded jobs across the state, along with an additional 12,000 to 20,000 local jobs. That's a total of 20,000 to 30,000 jobs,” wrote Mills in the MaineBiz Op-ed with Dubyak. 

    In 1980, traded sector jobs in Maine represented 40 percent of the state's total jobs. Today, traded sector jobs account for only 27 percent of Maine's total workforce, a decline that has bought the state well below the national average of 32 percent.

    “This loss of traded sector jobs has had the duel effects of out-migration of young people seeking better jobs and declining overall income as we become more and more dependent on lower-paying local jobs. Had Maine maintained a traded sector workforce equal to the national average of 32 percent, we would have 35,000 more traded sector jobs and, because of the multiplier effects, 55,000 additional local jobs,” MaineBiz Op-ed with Dubyak.  

    Some major well known FocusMaine leaders:

    • Michael Dubyak, former WEX Inc. president and CEO (co-chair)
    • Andrea Cianchette Maker, partner at Pierce Atwood (co-chair)
    • Eleanor Baker, Baker Newman Noyes co-founder and principal
    • William Caron Jr., president of MaineHealth
    • John Fitzsimmons, former Maine Community College System president
    • Karen Mills, former U.S. Small Business Administration administrator
    • Robert Moore, president and CEO of Dead River Co.
    • William Ryan, former chairman and CEO of TD Banknorth
    • David Shaw, founder and former CEO of Idexx Laboratories Inc.

     

  • Ramona du Houx: No more tax shifts

    Ramona du Houx
     
    Columns & Analysis | 
    Sunday, February 1, 2015

    Cutting taxes, most everyone would agree, could be a great idea. But how do you go about it without placing more of burden on the middle class?

    Not with Gov. Paul LePage’s plan.

    While LePage is trying to tackle the issue, his plan is focused on benefiting the top 2 percent. With his proposal those earning $50,000 to $175,000 will be taxed at the highest tax rate. And those earning about $10,000 to $50,000 would pay the same tax rate as the top 2 percent.

    So a schoolteacher earning $26,000 will pay the same rate as a successful investment banker who would get a 2.2 percentage-point cut to his tax rate. With the elimination of the estate tax, the top 2 percent will see a boon.

    LePage already cut the tax rate for the wealthiest. This is the second round and, again, the middle class will carry the burden. But then he plans to stop sending funding to municipalities for essential services. This cost-shifting will end up, as it has been, in property tax increases.

    When LePage was Waterville’s mayor, he ranted against any mention of cutting revenue sharing. Oh, the costs that shifting circumstances have on some politicians.

    What will hurt people daily is the sales tax increase to 6.5 percent. While I love going to the movies, I do not relish paying an expanded sales tax for my ticket. People will have to pay sales tax to have their hair done, go to a concert or visit a museum. Just to get the snow removed, hire an accountant or lawyer, or get a tow to the mechanic will cost people that sales tax increase.

    That tax plan is backward.

    Back in 2009, then-Gov. John Baldacci and Democratic lawmakers came up with a similar plan. The big difference was that the plan did not stop revenue sharing, increase property taxes or cut back on essential services. Yet it cut taxes for all tax-paying citizens, eliminating them for the less fortunate.

    But real tax relief for all never happened, as the right wing ad factory led the public to believe they would be paying a lot more because of sales taxes.

    A recent analysis by the Institute on Taxation and Economic Policy evaluated the local tax burden in every state. According to the study, in 2015, the poorest fifth of Americans will pay on average 10.9 percent of their income in state and local taxes; the middle fifth will pay 9.4 percent; and the top 1 percent will average 5.4 percent.

    From the report: “States and localities have regressive systems because they tend to rely more on sales and excise taxes, which are the same rate for rich and poor alike. Even property taxes, which account for much of local tax revenue, hit working- and middle-class families harder than the wealthy because their homes often represent their largest asset.”

    This ideological battle is being waged across the nation and involves the right wing promoting the economics of austerity over investing in people and programs in innovation that can grow the economy.

    Baldacci had it right. He consolidated administrations from school districts to branches of state government. He got the prison system to work together, and stopped agencies from duplicating work, all while getting bond initiatives passed that would go on to help research and development — the type of research that led to the University of Maine’s breakthroughs in bio-fuels and composite technologies.

    Maine’s innovative technologies began to really take off after 2007 with voter-approved bonds. The $50 million investment became known as the Maine Technology Asset Fund and nourished growing sectors of high-wage jobs.

    The funds were rewarded on a competitive basis. The recipients of the fund’s grants secured more than $80 million in matching funds. A 2011 evaluation of Maine’s research and development investments found that those 29 projects, that were granted funding by mid-2011, had directly created 289.5 jobs and preserved 303 in traditionally higher-paying sectors. Nineteen of those projects led to the creation of a new product or service.

    It is interesting to note that the MTAF hasn’t received any new funding since 2010.

    Maine's community colleges also received bond funding for their expansions, which has enabled thousands to get good-paying jobs

    Cutting taxes for the top 2 percent has not yielded jobs for Maine, or the nation. Meanwhile, America has experienced job growth for more than four years with Obama’s policies.

    Maine has been held back because of the trickle-down economic mantra LePage follows.

    Ramona du Houx is a published author and has written about Maine politics for 10 years. She is co-owner of Polar Bear & Company publishing and owns the news magazine Maine Insights. She lives in Solon.

  • Invest in job creation, not LePage's cost-shift tax policy

    Editorial by Ramona du Houx

    Cutting taxes, most everyone would agree, could be a great idea. But how do you go about it without placing more burden on the middle class? Not with LePage’s plan. While LePage is trying to tackle the issue, his plan is focused on benefiting the top 2 percent. With his proposal, those earning $50,000 to $175,000 will be taxed at the highest tax rate. And those earning about $10,000 to $50,000 would pay — the same tax rate — as the top 2 percent. So a school teacher earning $26,000 will pay the same rate as a successful investment banker who would get a 2.2 percentage-point cut to his tax rate. With the elimination of the estate tax, the top 2 percent will receive a boon. LePage already cut the tax rate for the wealthiest — this is the second round — and again the middle class will carry the burden.

    And he plans to stop sending any funding to municipalities for essential services. This cost-shifting will end up, as it has been, in property tax increases. When LePage was mayor of Waterville, he ranted against any mention of cutting back the funds to cities from the state. Oh, the costs that shifting circumstances have on some politicians!

    What will hurt people on a day-to-day basis is the sales tax increase to 6.5 percent. While I love going to the movies, I do not relish paying an expanded sales tax for my ticket. To have your hair done, go to a concert or visit a museum, you’ll have to pay sales tax. Just to get the snow removed, hire an accountant or lawyer or get a tow to the mechanic will cost you that sales-tax increase.

    This tax plan is backwards. While it appears to expand tax relief for the less fortunate, those same people will have to pay for the increased sales tax, and if they own a home or business — very significantly increased property taxes, and many of their benefits will also be slashed with health-program cuts.

    Back in 2009, Governor John Baldacci and Democratic lawmakers came up with a similar plan. The big difference was that the plan did not stop revenue-sharing to cities. It did not increase property taxes, and it did not cut back on essential services. Yet, it cut taxes for all tax-paying citizens, eliminating them for the less fortunate.

    But because it raised the sales tax, Republicans went to work and flooded the airwaves with ads declaring certain services would skyrocket. So, real tax relief for all never happened, as the right-wing ad factory led the public to believe they would be paying a lot more because of sales taxes. The opposite was true.
     

    A recent analysis by the Institute on Taxation and Economic Policy evaluated the local tax burden in every state. According to the study, in 2015 the poorest fifth of Americans will pay on average 10.9 percent of their income in state and local taxes; the middle fifth will pay 9.4 percent, and the top 1 percent will average 5.4 percent.

    “States and localities have regressive systems because they tend to rely more on sales and excise taxes, which are the same rate for rich and poor alike. Even property taxes, which account for much of local tax revenue, hit working- and middle-class families harder than the wealthy because their homes often represent their largest asset,” reads the report.

    This ideological battle is being waged across the nation and involves the right wing promoting the economics of austerity over investing in people and programs in innovation that can grow the economy.

    Baldacci had it right. He consolidated administrations from school districts to branches of state government. He got the prison system to work together, and stopped agencies from duplicating work, while getting bond initiatives passed that would go on to help research and development (R&D) — the type of research that led to the University of Maine’s breakthroughs in bio-fuels and composite technologies. The VolturnUS offshore floating wind turbine is the first of it’s kind in the Americas, and so is The Ocean Renewable Power Company’s tidal power generator. Both were developed at UMaine laboratories; both received state bond funding to jumpstart them. And federal grants happened directly afterwards.

    Maine’s innovative technologies began to really take off after 2007, with voter-approved bonds. The  $50 million investment became know as the Maine Technology Asset Fund and nourished growing sectors of high-wage jobs.

    The funds were rewarded on a competitive basis to university labs, businesses, and nonprofit groups with plans approved by the American Association for the Advancement of Science. The recipients of the fund’s grants secured more than $80 million in matching funds. A 2011 evaluation of Maine’s R&D investments found that these 29 projects, which were granted funding by mid-2011, had directly created 289.5 jobs and preserved 303 jobs in traditionally higher-paying sectors. Nineteen of those projects had led to the creation of a new product or service.

    But the Maine Technology Asset Fund hasn’t received a new infusion of funds since 2010. A legislative committee formed in 2006 outlined an R&D strategy for the state and recommended a $50 million annual bond investment in the Maine Technology Institute.

     Community Colleges received bond funding for their expansions, which has enabled thousands to get good-paying jobs. Gov. Baldacci put in new job-training initiatives, which have worked, but as the workplace changes and new tech jobs emerge, more needs to be done.

    Cutting taxes for the top 2 percent has not yielded jobs for Maine or the nation. This sector of society already has been given many chances to prove their "trickle-down" economics. America has experienced job growth for over four years with President Barack Obama’s policies. Maine has been held back because of the trickle-down mantra LePage follows.

    At a recent press conference, Democrats said they have proposed bills for job training, workforce development, college affordability, and job creation. No doubt they will include R&D bonds in this mix.

    All lawmakers should remember we had significant job growth before the Great Recession, and that was largely due to Baldacci’s policies. The state is in need of a real R&D bond package. And interest rates are historically low with the Fed at the zero-lower bound. The ongoing ripple effect in the economy from bond investments has been proven to create new companies with new jobs.