Improvement and growth are words not associated with the economy much anymore. While some feel the worst is over, unemployment levels haven’t truly improved – most people have stopped looking – and prices have continued to rise; gas in Greater Portland is now slightly above $3 a gallon in most places. A few are still searching for the silver lining in the thick blanket of gray overcast. The state believes there are sunny days ahead in Maine’s economic forecast.
In an announcement today, Governor John Baldacci stated that Maine’s economy was moving toward recovery. Baldacci cites difficult choices made on the state budget, taxes, and investments as the main contributors the state’s economic upturn. ““In Maine, we have held the line on broad-based taxes, made smart and targeted investments, including important investments in R&D, and restructured government at the State, county and school administration levels to make it more efficient and less expensive,” said Baldacci. School consolidation has a questionable history in regards to savings. Over half of all districts were not asked to reorganize. Some towns in districts that did were facing increases in property taxes. One must consider if a program that shifted costs can be considered a boost to Maine’s economy. Maine’s pension problem has also gone unaddressed. This ticking time-bomb has yet to be diffused and must be factored into Maine’s long-term economic health.
The governor did admit that this is not the time to break out the champagne just yet. ““As the [Maine Consensus Economic Forecasting Commission] has warned, there are many factors that could undermine the recovery, including policy changes in Washington and a continued lack of consumer confidence,” Baldacci said.
In October Michael LeVert, a Maine state economist, told the CEFC Maine’s economy looked to be slowly improving, but would not likely see pre-recession until sometime next summer. LeVert expected the hospitality and professional services sectors to growth quickest. Industries such as manufacturing would grow more slowly according to LeVert. The Director of Research at the Department of Revenue, Mike Allen, agreed with LeVert and added that a weak labor market could “put us at risk”.
People will be looking to Governor-Elect Paul LePage for signs of what he may do to aid the economic recovery. New additions to LePage’s transition team and rising state revenue should aid the new governor in continuing this pattern of growth.
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