Maine is positioned well for economic growth. We look at why
BY RAMONA DU HOUX
February 28th, 2011
Important Maine business and state government spending facts
“We owe twice as much in debt as we expect to collect in General Fund revenues over the next two years, and our debt as a percentage of state GDP is twice the national average,” lied LePage in his budget address.
Maine has bond ratings of AA2, AA+, and AA2 from the three leading bond-rating agencies, Moody’s, Fitch, and Standard and Poor’s. That would not be the case if LePage had a grain of truth in his assertions.
“Maine is the hardest place in the country to start and grow a business,” said Gov. LePage during his inaugural address—another big, outright lie.
Maine tax facts are:
• The Tax Foundation recently ranked Maine No. 31, with No. 1 being the best, for business tax climate in fiscal year 2011.
• Maine dropped from No. 1 in this same conservative Tax Foundation’s ranking of state tax burdens to No. 15 during Gov. Baldacci’s time in office.
• For individuals Maine is the middle of the pack, 26th, for taxes according to the Maine Economic Policy Center.
Before Gov. John Baldacci left office he stated, “We just got a financial report that re-forecasts revenues by over $365 million in this year, and in the next two years. A large amount of those revenues came in from corporate tax lines. I remind people those are corporations incorporated in Maine, doing business in Maine, and around the world. Maine-based businesses are being more successful than earlier forecast.”
Facts about Maine incomes, job and business:
• Twelve companies headquartered in the state of Maine were included on the 2010 Inc. 500/5000 list of the fastest growing, privately held companies in America. To qualify, the companies had to have revenues of at least $2 million in 2009.
• According to the Maine Development Foundation, from 2007 to 2008 the state of Maine experienced greater growth in per-capita personal income than the nation—3.9 percent compared to 2 percent. Then the Great Recession hit. Still, from 2009 to 2010, Maine’s personal income grew by 3.5 percent.
• According to the Maine Economic Policy Center, Maine is currently experiencing the fastest job growth of all its neighboring states.
• Maine’s labor market has stabilized with an unemployment rate at 7.3 percent, while the national average is 9 percent.
• Between 2002 and 2008, Maine exports rose over $1 billion. In 2010 Maine became the 5th fastest growing state for exports. Over the past eight years, Maine companies brought in $60 million in export sales as a direct result of trade missions and trade shows.
• The 2009 Trade and Energy Mission to Spain and Germany was the most successful trade mission to date, with over $21 million in sales and contracts reported by the Maine companies.
• In the past eight years, over 310 companies have located to Maine or expanded their businesses here, because of Pine Tree Zone Tax incentives. They represent a total investment of $873 million, with an annual payroll of $341 million. That’s 8,206 jobs. Pine Tree Zones companies are located in every county in Maine.
• Over 200 of the PTZ companies are in manufacturing. The majority of these businesses would never have considered Maine if it wasn’t for these highly competitive tax incentives.
National Semiconductor, after a national search for where to expand, ended up choosing — Portland, Maine. It’s a trend that happened with other companies, like T-Mobile and Backyard Farms, and continues to occur because of the tax incentives and Maine’s great workforce. President Clinton, during a campaign stop last year said, “Governor Baldacci’s Pine Tree Zones are like my Enterprise Zone initiative. It’s brought businesses to Maine — it’s a great economic development tool.”
Holding the line on taxes, while other states have raised taxes, helped to lower Maine’s tax ranking.
“And being able to not increase taxes, we put Maine in a much better position coming out of the recession,” said Gov. Baldacci.
The Measures of Growth report also confirmed that Maine’s overall tax burden has declined.
“This is largely because of initiatives such as school district consolidation and reform, corrections consolidation and reform, and spending caps on state, county and local governments that we instituted,” continued Baldacci. “State government has been trimmed by 1,000 jobs, and we’ve streamlined services, giving people better outcomes. State spending and general funding of the budget for this year is about the same dollar amount, $2.69 billion, as it was in 2001.”
“Instead of overspending, Maine has been a model of restraint. That doesn’t work for political campaigns and political rhetoric, but that’s the reality. I stand behind that reality. Those are the facts,” concluded Gov. Baldacci.
Maine is positioned well for economic growth, especially in the innovation economy, which it has been fostering with business initiatives, research and development funding, infrastructure improvements over the last eight years, and by keeping its fiscal house in order.