March 12, 2010

When state needs products or services, it should check Yellow Pages

— Every politician of every persuasion promises to support Maine people and create Maine jobs -- right?

They may have totally different approaches, but they all agree on that important issue.

This makes it all the more shocking that a search of the ''Checks to Businesses & People'' section of the MaineOpenGov.org Web site reveals that Maine tax dollars are supporting plenty of jobs -- outside of Maine!

Of course, most of our state tax dollars are spent here in Maine, but companies in Massachusetts are second on the list with $52.8 million (all figures rounded) spent there in 2007.

That is just over $1 million in taxes a week!

That is not the worst part: Total spending for 2007 shows state of Maine vendor payments of just over $1 billion. About 64 percent ($647.5 million) was spent with Maine companies.

This means that more than a third of these tax dollars ($365.3 million) were spent outside of Maine in 2007.

That figure is, unfortunately, $1 million a day!

Politicians regularly rationalize high government spending by emphasizing the ''multiplier effect'' -- which estimates that every dollar of tax-funded spending generates four or five or six dollars in the private sector economy.

That is why keeping a military base, a mail-sorting facility, an IRS office or any government installation is such a high priority with state officials.

This is also the reason that every time a large government contract is assigned to a Maine company, elected officials fly in to have their pictures taken to make sure they get the credit for supporting local workers.

OK. But if this multiplier effect argument is part of the justification for high government spending -- then why is Augusta sending a million tax dollars a day to companies in other states?

Some people argue that there are specific services and products unavailable in Maine, and that is sure to be correct. But it can't be everything!

A simple search on MaineOpenGov.org shows that this million tax dollars a day is spent on things like office supplies, office furniture, marketing support, printing, consulting, professional services, public education services, desktop computers, office interior design, repairs to buildings, laptop computers, document scanners, construction contractors, computer maintenance, computer printers, etc.

Why aren't these state purchases going to Maine firms? Could it be that Maine's high costs of doing business make Maine companies less competitive? If so, who is responsible for that?

On a national basis, ''Made In USA'' is a rallying cry in political campaigns and with government spending. The state of Maine funds agencies filled with employees who are well-paid to bring businesses to Maine.

As taxpayers, we spend millions on advertising and promotions to encourage business spending and more tourism in Maine.

Taxpayers also support efforts to promote Maine-made products across America and around the world.

We send officials to trade shows and politicians on junkets to help Maine businesses expand beyond state and international borders.

There are public employees who work to bring conventions and cruise ships to the state because a large group of visitors might spend $100,000 or so while they're here for the day.

That is all meaningful, but pales in comparison to the million dollars a day, 365 days a year, that our state government spends with businesses outside of Maine.

So pick up the Yellow Pages, Augusta!

If even half of the products and services purchased outside Maine are available through in-state businesses, which employ Maine people who pay Maine taxes, it would pump $183 million into Maine's struggling economy. The multiplier effect on that is probably in the neighborhood of another $1 billion.

That could be churning through the Maine economy and back into the pockets of Maine people.

— Special to the Press HeraldIf even half of the products and services purchased outside Maine are available through in-state businesses, which employ Maine people who pay Maine taxes, it would pump $183 million into Maine's struggling economy. The multiplier effect on that is probably in the neighborhood of another $1 billion.

Were you interviewed for this story? If so, please fill out our accuracy form

Send question/comment to the editors




Further Discussion

Here at PressHerald.com we value our readers and are committed to growing our community by encouraging you to add to the discussion. To ensure conscientious dialogue we have implemented a strict no-bullying policy. To participate, you must follow our Terms of Use.

Questions about the article? Add them below and we’ll try to answer them or do a follow-up post as soon as we can. Technical problems? Email them to us with an exact description of the problem. Make sure to include:
  • Type of computer or mobile device your are using
  • Exact operating system and browser you are viewing the site on (TIP: You can easily determine your operating system here.)