MBNA Uncertainty

The takeover of MBNA Corporation by Bank of America is exactly the sort of news Maine did not need. Already reeling from a succession of factory closings over several years and facing the potential loss of Portsmouth Naval Shipyard and Brunswick Naval Air Station, the state now faces the loss of thousands of jobs at MBNA.

Bank of America has announced that it plans to cut 6,000 jobs from the combined bank and MBNA work force of about 200,000. No one has said that any of those cuts will come in Maine, where MBNA is the state's seventh-largest employer, with about 3,000 workers.

Rumors and uncertainty fill the air, and workers wonder if their paychecks and benefit packages will soon be history. Unfortunately, there is reason to worry. Bank of America lacks long-term ties to Maine. There might be sound business reasons to seek to consolidate some of the work now performed here.

With this prospect in mind, state officials should develop plans to market any facilities and any workers who become casualties. That should not be an impossible task.

The MBNA facilities are attractive — they seem more like college campuses than office buildings — and are wired and arranged for efficient operation. Perhaps even more important, the work force is skilled and efficient. Any national or international corporation seeking to establish a call center would find this combination appealing. Indeed, that combination might be so impressive that, rumors aside, it leads Bank of America to retain all (or at least most) of MBNA's Maine operations.

One factor, not a new one, could stand in the way both of continued Bank of America operations here or a new company filling any void. It is Maine's reputation as an unfriendly state for business.

Viewing the MBNA/Bank of America transaction recently, Gerard Cassidy, a bank analyst with RBC Capital Markets in Portland, told Blethen News Service that he thinks Bank of America will seek the most efficient and profitable way to process credit cards. Cassidy offered a gloomy prediction. "My best bet would be they're going to greatly downsize or eliminate the presence of MBNA in Maine because it will be more cost-effective to employ people outside of the state because of the high cost of doing business in Maine, from both the high business-tax levels to the local level of taxes."

We hope Cassidy's doomsday projection is wrong. But right or wrong, it sends a clear message to state leaders.

Businesses without long-term ties to Maine can be sold on our work force, sold on our beauty, sold on state-of-the-art facilities. But as they look at finances and profitability, it is far more difficult to sell them on a tax structure that makes it less profitable to operate here than elsewhere.
—Kennebec Journal, Augusta

Losing a Champion

Governor Percival Baxter's champion is leaving. Buzz Caverly has worked at Baxter State Park for more than forty-five years, directing park operations since 1981. He announced his retirement in late June.

Caverly has been a tireless advocate of protecting Baxter's vision of the 200,000-acre wilderness and its crown jewel, Mount Katahdin. He often echoed the late governor's mantra of "forever wild" to any who would listen.

Sometimes that would irk some of those listeners. People in Millinocket, the town nearest to the park, often criticized Caverly as being unbending when he would reject suggestions to increase commercial uses or to cut and maintain snowmobile trails through its wilderness. Others chaffed at Caverly's rigid enforcement of Baxter's edicts when it came to hunting. There were to be areas where the sport is allowed, and places where it isn't, and Caverly kept it that way.

When Baxter gave the parkland to the people of Maine he attached a few strings to his gift. First and foremost the land, most of it anyway, was to be kept as a preserve, a place where wildlife — both flora and fauna — would prosper. Next, it was to be a place where people could enjoy nature, and solitude, without changing it.

Caverly listened to Baxter while he was alive, and studied his will after the governor's death. And he kept his promise to Baxter and to Maine's people to keep Baxter State Park wild.

He will be missed.
—Sun Journal, Lewiston

The Price of Power

Back around the turn of the century, Maine legislators enthusiastically decided to restructure the state's electric power industry on the theory that throwing the market open to competition would result in lower electricity bills for consumers. The state's three primary utilities — Central Maine Power Company, Bangor-Hydro Electric Company, and Maine Public Service Company — were directed to sell their power-generating facilities and become distributors only. Restructuring proponents offered up rosy predictions that power producers would be flocking to Maine in droves to bid for business. Prices could only go down.

Five years later, we've all seen what has happened. Large out-of-state interests bought up Maine's generating facilities and, instead of buying the electricity from Maine-based generators closely regulated by the state's Public Utilities Commission (PUC), consumers were subjected to the open market. Trouble was, it didn't work. Our generating plants are now owned by out-of-state and foreign interests that sell their electricity to the highest bidders nationwide. The few bids that did come this way offered rates that were higher, not lower, than prevailing rates.

The PUC was forced to establish what was called a standard rate offer that's been rising since the beginning. Maine households have one choice: pay the higher standard rate or turn off the electricity.

Now a new wrinkle is about to be added to the mix — one that likely will push those annual electric bills still higher for thousands of Maine ratepayers. ISO New England, which manages the region's power supply grid, claims new payments are needed to encourage generators to stay in business and expand generating capacity. These are the same generators who were going to be providing less expensive electricity to Mainers under the competitive market scenario.

ISO New England claims power suppliers do not receive a fair price for electricity because of caps now in place to protect customers from price spikes. What happens without those caps? Just ask customers in California, who paid billions of dollars in excess charges when producers there illegally manipulated the supply to force prices upward.

One thing is for certain. Maine legislators, the PUC, and then-Governor Angus King were either na?ve or numb when they succumbed to the rosy predictions of restructuring proponents five years ago. They destroyed a utility system that, for all its faults, was far superior to that which exists today. And all of us will be paying the price for generations to come.
—Ellsworth American

Patience for DirigoChoice

The state has a two-year contract for DirigoChoice with Anthem Blue Cross Blue Shield that will expire at the end of 2006. Anthem's actuaries have said it will be twenty-seven months into the program before they can assess its sustainability, Sharon L. Roberts, director of stakeholder relations at Anthem, told the Times Record.

Rather than cap DirigoChoice now and cut the state's losses, as Republicans suggest, we say let the contract run its course and stop trying to dismantle or end the health-care program before it hardly is off the ground. Remember, Dirigo Health passed with strong bipartisan support two years ago. Most objections being voiced now are worst-case scenarios. Why not imagine success?

Yes, enrollment has been slower than expected, but it is growing and expected to exceed 14,000 by year's end. How do we know that in another year, with positive promotion, that number won't greatly increase?

Almost 3,000 small-business employees, more than 2,500 self-employed people, and more than 1,800 people who are unemployed or who have no coverage through their employer have signed on to DirigoChoice. They and subsequent enrollees will be the program's best salesmen.

Let's give efforts to create savings in the health-care system a chance to mature. The Maine Quality Forum is promoting best practices; hospitals are voluntarily honoring caps on costs and profit and have curbs on major spending; and on the horizon is the state's biennial plan on delivering effective health care, including prevention, with maximum efficiency.

When DirigoChoice is twenty-seven months old, Anthem's actuaries will assess whether the program is viable — that is, if enough of the uninsured have signed on, if the pool contains a broad range of risks, and if the rates can be competitive so that DirigoChoice will continue to be a good choice for enrollees without needing continual subsidies by the state.

If we don't wait, we'll never know what might have been.
—Times Record, Brunswick