The Voice of the Voters

Portland Press Herald

The last thing John Baldacci should take from his re-election as governor November 7 is a mandate for more of the same. That's not to say that Baldacci didn't deserve another four years. Relative to his rivals, he was the best candidate — pragmatic, experienced, and hard-working.

But for more than a year now, discontent has been in the air. And no matter how one slices the numbers, Baldacci was on his way to receiving a weak endorsement. He should keep in mind that a majority of Mainers voted for somebody else.

Frustration with a lack of progress on the issue of tax reform took the form of the Taxpayers Bill of Rights ballot referendum. That made this the second election year in a row during which Mainers considered constraining their government's ability to raise taxes — and the second time they rejected a formula-based approach to the problem.

That shouldn't be taken as a sign that Maine people do not want their taxes lowered and their government made more efficient. And while much of the debate over TABOR centered on the overall state tax burden, there are, as well, valid concerns about how Maine taxes its citizens. Some Mainers are paying a disproportionate share of taxes, especially property taxes. Maine's sales tax, meanwhile, pulls in a smaller proportion of the state's overall tax revenue than is typical in states with sales, income, and property taxes.

Maine cannot hope to compete if it doesn't invest in transportation links, especially its roads and bridges. It will be a critical task for Baldacci to find consensus around such needed investments.

And Baldacci has to build on the work he started in his first term. This is especially true with health care. Baldacci made the compromises necessary to win passage of his Dirigo Health program. Dirigo is a good first step, but the time for first steps is past. In its current form, Dirigo is simply not substantial enough to make a measurable difference in the health-care system in Maine. It sets savings targets for health-care providers, creates a new insurance product, and promotes healthy lifestyles. But it has little teeth when it comes to cutting costs.

The governor's first term was marked by early success, but marred by stumbling in his second two years. We hope this lack of focus was a symptom of the governor not wanting to create controversy with bold initiatives. If so, then his second term presents an opportunity. Constitutionally prevented from seeking a third term, Governor Baldacci has only a policy agenda to worry about now.

Sun Journal, Lewiston
Commonsense Business Development

Maine has tax incremental financing. It has Pine Tree Zones. It also has community block grants, seed grants, and WIRED grants. All these economic development tools, however, are weak in comparison to pure commonsense.

Outdoor retailer Cabela's recently dropped its request for a waiver on sales tax collection on catalog and Internet sales inside Maine, after what appears to have been some good old-fashioned horse trading by the company and state and local officials. Cabela's has plans for a 125,000-square-foot store in Scarborough, right off turnpike Exit 42, as the centerpiece of a $75-million development. In other states, Cabela's was freed from collecting catalog and Internet sales tax because of legal loopholes relating to the operation of subsidiaries.

The retailer will now reportedly establish a call center or other subsidiary operation in Maine to avoid the sticky question of the Internet and catalog sales tax, which is great news for a state littered with vacant but turnkey facilities, especially after the consolidation of former MBNA sites this year.

In seeking the tax break, Cabela's was apparently rebuffed by a state government unwilling to offer an advantage unavailable to established retailers, according to the Portland Press Herald. They must have expected this. This is L.L. Bean country, and the state wasn't going to make it easy for some flatland interloper to invade Bean's turf.

Yet Cabela's was disinclined to budge and jeopardize its tax exemptions elsewhere. Maine government was apparently ready to stand its ground. But instead of one side walking away, they found a resolution to satisfy everyone without tax breaks.

Why applaud a fair agreement that plays by the rules? Because it doesn't happen enough.

Commonsense remains an effective, but underutilized, economic development policy. Cabela's is worth having in Maine, but on Maine's terms. State government was right to stand firm, and then negotiate for the best deal possible for Maine, not Cabela's.

Eventually, federal lawmakers need to address Internet and catalog sales-tax exemptions as a whole.

For now, though, the Cabela's deal is an example of strong, but sensible, economic development. Maine needs to be friendly to business, but not give away stores to do it.

Bangor Daily News
Charting Maine's Future

In what is the most perceptive and ambitious review of Maine in years, the Brookings Institution has drawn on previous work, done an impressive amount of new research, and added substantial analysis to create a Maine action plan based on what this state has known but has not known how to use. The virtue of this work is that it presents previous ideas as a sensible whole, so the connections between state and local government, between policy and outcomes, between elected officials and the public are apparent, and they point Maine in a clear direction.

GrowSmart Maine of Yarmouth, which will use the next four years to build support for the report's conclusions, hired Brookings more than a year ago to begin this project. GrowSmart now has plenty of evidence for advancing a policy that increases government efficiency, lowers taxes, and invests in both the state's future and its "brand," the things that make Maine immediately identifiable to the world.

Throughout the report, called "Charting Maine's Future," is a particularly welcome piece of advice: Cheer up, things aren't as bad as you think. Yes, taxes are too high and have to come down, and, yes, Maine faces some unusually high government expenses while it underfunds promising areas of economic development, and, yes, there really are two Maines.

But Maine is among the fastest growing states in the country because people want to live here; its quality of life and its success in raising its college-going rate, for instance, are worth celebrating; where it has invested in areas of research such as biotechnology, it has found real progress. Maine's challenge is that it has hit a dead end: an overtaxed tax base and a demand for investment in the presence of further possible restrictions such as the Taxpayer Bill of Rights. Brookings supplies a way out of this problem.

It points out, for instance, that not only are administration costs high in K-12, as is well known, but that they are high in state government, too, and high within the university system, with $2.13 going to non-instructional payroll for every $1 going to instructional payroll, the highest ratio in the country. Local government, absent schools, is fairly frugal by comparison, but even there, because of the amount spent on K-12 education, "little room appears left to support local parks and recreation programs, libraries, or even local road building."

"Charting Maine's Future" offers insightful explanations for how Maine has ended up with high taxes, stretched too thin where it should be spending, and growing in ways that defeat one of its strongest assets — its natural beauty. But the pages of the report that will be talked about most are its recommendations for action.

They include the following: a ten-year, one hundred and ninety million dollar bond called the Maine Quality Places Fund, a means to revitalize Maine towns, provide access to its natural areas, and promote tourism; a two hundred million dollar Maine Innovation Jobs Fund to establish research and development funding at its proper level for promising industries and support industry partnerships that will lead to networks and workforce development; and tax reductions that will lower the top income-tax rate and increase the tax exemption at the bottom.

To pay for this and more, the report wants to export taxes onto tourists by raising the lodging tax, and then cut government by sixty million dollars to a hundred million dollars through efficiencies, reduced administration, and slicing away ineffective, unaffordable programs. The idea is to cut to invest.

This is welcome. After decades of trying one program and then another, starting projects only to give them too little funding to succeed, demanding lower taxes without a vision of what that would mean, "Charting Maine's Future" has shown the state a better way. It should become the state's handbook for reforming the way Maine does business.

Kennebec Journal, Augusta
Good News On Health Plans

The incredible shrinking world of Maine health insurance offerings got a little larger with the recent roll out of a new plan and purchasing group offered through the Maine State Chamber of Commerce. It's a welcome development.

For years now, the number of health insurance options in Maine has been getting steadily smaller and the price of what's left has gotten steadily bigger. Small businesses and individuals have been particularly hurt by the trend, though it's fair to say that all businesses — large and small — have been affected, while the number of uninsured Mainers continues to grow. Governor John Baldacci's experiment in health insurance, the subsidized DirigoChoice plan, has been one attempt to deal with the problem, yet there are still far too many folks in Maine for whom the options are too few and too costly.

Enter the Maine State Chamber, which has teamed with Anthem Blue Cross and Blue Shield of Maine to offer employers with fifty or fewer workers a new menu of plans. Those plans are not going to be less costly than others, but the new Chamber options include the ability to insure companies that have only one employee. That's been a particularly difficult and expensive area for coverage in the past.

Maine State Chamber president Dana Connors took great pains to reassure DirigoChoice's champions that the Chamber was not competing with the state plan. We don't know how they define competition at the Chamber, but we'd respectfully disagree. We think it's healthy competition.

And that's a good thing.