SCARBOROUGH – I recently had the pleasure of attending the Maine State Chamber of Commerce’s Leadership Summit at Sunday River. We spent hours discussing Maine business issues, and one of the “takeaways” was that we don’t talk nearly enough about Maine’s success stories.

We’ve all heard about Maine’s low “business friendliness” ranking in Forbes magazine. In fact, it’s front-page news. In some categories, however, we are already at or near the top of the charts.

Last April, Ernst & Young published a national study regarding which states had the most competitive tax systems for business. Maine placed first. Due to such initiatives as the Business Equipment Tax Reimbursement program, our effective tax rate on new investment was only 3 percent. The study did not consider the overall business climate, regulatory burden, availability of educated work force or other business-critical issues. But the tax burden on new investment is extremely important when businesses make spending decisions.

Just this month, the Washington, D.C.-based Tax Foundation released a similar study titled “Location Matters,” which estimates the total effective tax rate by different types of C corporations in each state. They sort businesses into two groups: mature and new. Without accounting for BETR and similar programs, Maine placed 27th in the nation for mature operations and second in New England. For new companies, we ranked 20th overall.

Our ranking for research and development firms was also impressive. We placed ninth nationally for mature businesses in that field. The Maine Technology Institute provides funding for many businesses in the R&D and technology fields. In 2011, every $1 awarded by MTI leveraged $10 to $14 in public and private funds.

The Midcoast Regional Redevelopment Authority at the former Brunswick Naval Air Station is one of Maine’s emerging success stories. Molnlycke Health Care is expecting to hire 100 employees. Resilient Communications, an IBM spinoff started by a Bowdoin graduate, expects to employ as many as 150. Southern Maine Community College has been responsive to these businesses as they open their Brunswick campus. The school is working with them to provide work force training.

Regarding Kestrel, one could argue that Wisconsin has done us a favor. Kestrel was looking at about $100 million in total debt with no revenue for three years. All of its engineering design, mock-ups and prototypes will continue to be created in Brunswick. The “green planes” will be made in Wisconsin, but they will be flown to Maine for completion and final delivery. Kestrel estimates they will create 300 jobs. The Maine facility will eventually support as many as 100 of them.

Many unheralded companies are quietly succeeding in Maine. Just this year, JSI Store Fixtures in Milo bought out a competitor and grew their sales 60 percent. JSI opened in a former Dexter shoe plant in 2001 with 35 employees. This family business currently employs 180 with a payroll of over $5 million in an economically depressed area.

North Berwick-based Hussey Seating purchased Illinois’ Clarin Seating and quietly moved all its jobs to Maine, adding 60 jobs to its 250-employee work force.

Secretary of State Charlie Summers has retained a small-business advocate in his office to handle crisis resolution between state government and small businesses. By the end of February, the advocate had helped save two businesses and enabled a third to expand. As a result, 15 full-time and 14 seasonal jobs have been preserved, and 10 manufacturing jobs may be created.

Two of our biggest remaining obstacles are matching job skills to job availability, and energy costs. I was recently appointed to the State Work force Investment Board. We are tasked with maximizing federal Work force Investment Act money the governor has at his discretion to retrain workers. We hope to partner with local chambers of commerce to identify job skills that local employers need and then communicate those to the Maine Department of Labor. The DOL will then partner with the Community College System to provide training programs for people who need jobs.

Regarding energy, there are glimmers of hope. Maine may be sitting on vast reserves of natural gas. If we aren’t, Canada is. We will be seeing more natural gas pipelines throughout the state, decreasing energy costs for businesses and consumers. Mills in Baileyville and Lincoln recently converted to natural gas, saving as much as 40 percent on energy costs.

The LePage administration and this Legislature are committed to job creation, and we are tackling the challenge on many fronts: health insurance reform, regulatory reform, tax reform, unemployment insurance, worker’s compensation and more. We may never reach the Forbes Top 10, but imagine how we can shine if we focus on constant improvement.

Rep. Amy Volk, R-Scarborough, serves on the Legislature’s Labor, Commerce, Research and Economic Development Committee.

 

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