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Highlights of ME Governor Baldacci’s 2006 State of the State

Governor John Baldacci of Maine pauses to look to the Gallery in the State House at his wife, Karen and son, Jack thanking them for their loving support. Photo by Ramona du Houx Improvements with Governor Baldacci: “More people are working than ever before”  — 22,000 new jobs from 2003 to 2005. “More of our children are going to college” […]


Governor John Baldacci of Maine pauses to look to the Gallery in the State House at his wife, Karen and son, Jack thanking them for their loving support. Photo by Ramona du Houx

Improvements with Governor Baldacci:

“More people are working than ever before”  — 22,000 new jobs from 2003 to 2005.
“More of our children are going to college” — Community College enrollment up 42 percent.
“More families are healthier and have health care” — 15,000 enrolled in Dirigo, 2,000 companies.
“More families are getting tax relief” —  225,000 people eligible for property tax relief.


January 2006

By Ramona du Houx

A mark of a leader who has insight and the foresight to help his people improve their lives and livelihoods is his ability to orchestrate programs throughout the spectrum of issues that create an overall foundation that can be built upon successfully.

In order to move Maine forward into a high-tech international economy, more people needed to obtain higher degrees, research and development projects needed continued funding, high-tech telecommunications infrastructure had to become more available, incentives for businesses to create jobs had to happen, the creative economy encouraged, and taxes had to decrease.

To responsibly accomplish these tasks the environment had to be protected, new energy resources utilized, people’s rights, lives, and jobs protected, and health care needed to become accessible for everyone.

Governor John Elias Baldacci saw clearly that all this had to be done, as well as putting Maine’s fiscal house in order.

In his State of State ’06 he outlined some of these accomplishments and how we need to continue to build upon these successes. The following are highlights with the governor’s comments in quotes.

Incentives for job creation:

A Pine Tree Zone (PTZ) certification gives companies tax incentives, enabling businesses to grow and economically challenged areas to become more attractive for new businesses to set up there. Eligible businesses include firms engaged in manufacturing, financial services, and Maine’s seven targeted technology sectors. Seventy-six companies are now PTZ certified.

“My Pine Tree Zone economic program is creating more than 3,000 jobs throughout the state. Tonight I ask for your support in expanding PTZ eligibility in Washington County and designating PTZs in the mid-coast to redevelop Brunswick Naval Air Station once it’s closed.”

“Over the past three years, over 1,400 new small businesses were launched in Maine and small businesses created nearly 5,000 new jobs.”

The Governor also announced plans for new tax incentives for the film industry, as well as funds in the budget for the creative economy.

“While our economic plan is working, the rising tide of our economy must reach every corner of the state. If we stay the course of our plan with investments and hard work, we will grow 25,000 new jobs in Maine in the next five years.”

Research & development:

According to a recent national economic study, Maine ranks second in the nation for the number of businesses that grow out of university spending on research and development.

The governor has continually secured R&D funding while establishing coalitions between businesses, educational institutions, and the state, helping R&D economic development. “As part of my economic plan, last fall I presented the State Science and Technology Plan that calls for Maine’s annual investment in research and development, including both private and public funding, to reach $1 billion by 2010. My budget includes a down-payment — matching money for marine research in the Gulf of Maine and for new businesses launched by the University of Maine.”

Traditional industries aided:

A major reason some mills are operational today is because Governor Baldacci refused to give up on them and their workers, and did everything within his power to find other companies that would take over the mills and put in place either a new business model or more profitable product line, making them competitive again.

In one case he refused to allow receivers into the mills, sending state troopers to protect the mill from the receivers who would strip them of their assets. Shortly after, a deal was brokered, keeping the mill operational.

“In Penobscot County more than 1,400 Mainers whose jobs were threatened by bankruptcy are still working at paper mills … And for the mill that didn’t reopen in Brewer, this budget appropriates $500,000 to redevelop that site to make it a job generator once again.”

High-tech telecommunications infrastructure:

“Last year I came to you with a bold proposal to ‘Connect Maine’ — to serve 100 percent of Maine communities with cell phone coverage by 2008, and 90 percent of Maine homes and businesses with broadband by 2010.

“We’re ahead of schedule on both and will meet the broadband goal later this year … Later this month, I will submit Connect Maine legislation to further expand the availability and quality of broadband and wireless phone service throughout the state.”

Saving jobs & improving livelihoods:

In addition to saving 1,400 mill jobs, 200 tanning jobs, and other jobs throughout the state, the governor led the fight to save jobs at our bases.

“Together we successfully took on the Department of Defense when they tried to close our three military bases. We saved 4,800 jobs in Kittery and almost doubled the jobs in Limestone.”

The Kittery base is also adding new jobs and has worked with the governor to establish coalitions that have encouraged the workers to become the “gold standard” in workmanship for America.

The governor also proposed an increase in the minimum wage this year.


Last year Maine increased state education spending by $250 million, ramping up the state’s share of education costs to 50 percent and helping to decrease property taxes in some areas.

The governor’s Early College for ME program has allowed high school students the opportunity of experiencing college-level courses, encouraging them to further their educations. He proposes to expand the program.

The governor’s early childhood education programs encourage learning at young ages, helping to fulfill his vision of a pre-K-16 educational system.

The governor’s Community College System has given opportunities to thousands of people to gain a degree and improve their potential earnings, while training them for the challenges of our new economy.

“Three years ago we transformed higher education in Maine by establishing the Maine Community College System. It has been a great success. Enrollment has increased 42 percent.”

“To make college more affordable, I am also proposing we expand the student loan deduction. It will open the doors of education wider than ever before.”

“My budget provides $750,000 to educate more nurses at both the University of Maine and the Community College System.”

Maine is one of two states in the nation that puts more than 65 percent of their education budgets into instruction. Recognizing the hard work teaches do, the governor’s budget proposes raising teacher starting salaries to $30,000.

Environment & Energy:

“We have placed stringent standards on vehicle emissions. We are in the forefront of state and regional efforts to reverse global warming through reductions in greenhouse gas emissions. And we are taking toxic materials out of our environment through the nation’s first program to recycle old computers and televisions.”

In the three years, Maine completed land conservation projects totaling more than 700,000 acres.

“More than 7 million acres, or 40 percent of our working forest, is certified as sustainably managed … and that’s good for the environment and the economy.

“When I took office the subject of energy wasn’t a hot button issue. Even so, I created the Office of Energy Independence and Security. I knew that increasing our independence and efficiency, along with tapping into our renewable energy resources would be good for Maine.

“Maine state government is leading by example. We reduced travel, tripled the number of hybrid vehicles in the state fleet, and expanded the state’s vanpool program. By instituting these measures early — before the current energy price crisis — the state has been able to save 300,000 gallons of fuel, and putting our electricity purchase out to bid will save us $4 million by June of this year.

“Over the past three years I have advanced policies and programs to make the entire state more energy independent: we now have a solar rebate program, natural gas conservation program, a wind program in Mars Hill, and a tax exemption for those producing biofuels in Maine.

“This year I will be introducing a comprehensive energy bill to expand the use of renewable energy, stabilize electric costs, and adopt statewide efficiency standards for appliances.”

Fiscal responsibility & taxes:

The governor kept to his promise of not raising broad-based taxes despite being burdened with a $1.2 billion revenue shortfall, which represents 20 percent of the state budget, when he took office; the Rainy Day Fund was empty, now it has over $100 million.

His determination to have the state become fiscally responsible has led to a projected revenue surplus of over $150 million.

“We balanced the budget without raising a broad-based sales or income tax, and we’ve continued to do this every year since … During my administration, we have cut the size of state government by more than 600 positions.”

The Maine state budget growth is the eighth lowest of all fifty states, according to a survey by the National Governor’s Association.

“In fact, over the past four years state government spending has grown at just over three percent. That’s the lowest increase in spending in over 30 years.”

The low budget growth gives the state good standing when it comes to securing loans for bond issues. Keeping taxes stable has helped stabilize state government.

By not increasing broad-based taxes the tax burden has decreased, because personal incomes have increased. Holding the line on taxes brings down personal state income taxes.

Under legislation last year, called LD 1, property taxes were decreased while education spending increased. With LD 1 the circuit-breaker program is giving residents substantial rebates, reducing their property taxes. The state has extended the circuit-breaker application deadline to the spring.

“Evidence shows that in many towns LD 1’s increased education funding resulted in property tax relief … In addition, we put spending caps at the local, county and state level. LD 1 increased direct property tax payments to Maine residents; 225,000 people are now eligible for direct property tax rebates.”

The second half of the governor’s measure to reduce property tax is to have properties assessed at current usage, meaning that if a family home remains a family home it cannot be reassessed at a higher value simply because property values in the neighborhood have increased.

“I don’t think anybody should be taxed out of their home because someone paid an outrageous price for the house next door. That’s why I’ve proposed a constitutional amendment that will put in place a fair and workable way to value property and keep taxes low.”

The governor also proposed eliminating the personal property tax on new business investments (BETER), a tax that is holding up growth in areas of the state.


The governor’s first item on his agenda was to complete a promise he made during the election campaign — to tackle Maine’s health-care crisis. Working with all the players in the health-care sector, he came up with a unique plan — a plan to make Maine the “Healthiest State.”

This plan is also making Maine’s business climate healthy. All across America companies are relocating to Canada because health-care costs in the U.S.A. are out of control.

“Dirigo is more than just an insurance product; it’s about improving the quality of our health. It’s about reducing health-care costs and making Maine the healthiest state in the nation.”

The governor aggressively led the fight for his Dirigo Health program which was passed by the 121st Legislature.

•     Dirigo Health reduces the overall growth of health-care costs. $43.7 million was declared as savings from Dirigo Health.

•     Dirigo Health supports programs that are geared to making Maine the Healthiest State. By ensuring people have access to care and advice before they become ill, Maine is becoming healthier. Maine recently became the number one state to reduce teenage smoking because of the state’s preventive measures.

•     Dirigo Health has gained national attention, as many states are looking for solutions to the critical issue.

•     Under Dirigo Health, DirigoChoice was created — which is the state’s affordable insurance provider.

•     With DirigoChoice, over 15,000 people are covered; 2,000 small businesses are satisfied knowing that they are covered and that they have the ability to insure their employees.

•     The Dirigo Health plan is ever evolving and needs to be, because of the diversity of organizations involved.

•     It is the first attempt in the United States to tackle the health-care crisis in this way.

•     It is unique in that it requires the responsibility of all sectors of health care to work together.

•     It is needed and, given the opportunity, will make Maine the healthiest state.

“Dirigo is about innovation — doing whatever needs to be done to expand coverage to more working families. We will build on our success and take the next important step.

“We were successful a decade ago in creating a new solution to deliver workers’ compensation — The Maine Employers Mutual Insurance Company. Tonight I am starting the process to make sure Dirigo can expand affordable coverage for more Maine citizens.”

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