October 20, 2013

Charles Lawton: Maine needs fewer but bigger investments in select areas

We should take a silver bullet not a silver buckshot approach.

Silver buckshot she called it. Former state economist, former director of the Maine Development Foundation and now president of Thomas College, Laurie LaChance said it was the opposite of the forever elusive “silver bullet,” the one great discovery or policy that would solve all our problems. Instead of a single bullet, Maine – in its efforts to stimulate economic development – scattered blasts of buckshot all over the place. This served both to placate the cries from every town and region to “do something to create jobs” and to satisfy economic developers that every idea, every sector of the economy, every development incentive had been tried.

The so-called Brookings Report of 2006 that now seems ancient history critiqued this tendency directly. “Maine has a long tradition of spreading out what development resources it has, in keeping with the geography of its historically decentralized population and the multiplicity of its small business and residential centers.” The resulting dispersion of resources “undercut effectiveness” and led to policies that “drifted ... from (their) initial focus.”

This small town, small business dilemma is rising to the fore again. We live in towns built around the economic structures of the 19th and even 18th centuries, and we are loath to give up the “local control” and “small town atmosphere” we feel would be lost if we adopted policies that didn’t give every one a little bit of the pie, however much smaller that pie may be getting. Across the state, scores of towns are rushing for the exits of school districts they joined just a few years ago, hoping somehow that state aid from Augusta and cuts to non-local administrative expenses will hold down the cost to taxpayers.

Small rural hospitals are struggling to stay open and fighting to maintain federal subsidies based on how far apart they are from each other. Telecommunications and Internet service providers continue to pursue the “universal service” goal. Every year the Department of Transportation struggles to set road repair priorities in an environment of declining fuel tax revenues and diminished federal funding.

Yet while we continue to fight this retreating action to defend “the multiplicity of (our)small business and residential centers,” we bemoan the fact that many (if not most) of our children are moving away from these idyllic small towns because their idealized small businesses offer neither the number and variety of jobs and career choices the better prepared of our children seek nor the education/training opportunities the more poorly prepared of our children need.

And we bemoan the fact that, in spite of the less well-paved roads, the less than full schools and the slower speeds of our movie downloads, our taxes keep going up.

We need to wake up, smell the coffee and see behind the Potemkin village veneer of our “small town, rural atmosphere.” If we continue to spread whatever investments we make – in roads, in schools, in Internet service, in economic development incentives – around evenly so everyone gets a “fair” share, we will continue to get what we’ve gotten for the past two decades – slow job growth, an exodus of young people and an ever growing number of elderly increasingly dependent on transfer payments for income and health care.

If, on the other hand, we face the opportunities afforded by making choices, by making fewer but bigger investments in selected areas where economies of scale and the interconnections of clustered homes and clustered businesses create greater benefits for all, we can create a better future.

We can alter the death spiral we’ve allowed to begin in the name of equity, local control and “small town atmosphere.”

In fact those alleged “reasons” for our past development policies are in fact little more than fig leaves covering the more fundamental causes of our policies – fear of facing the future with brutal honesty and humble courage.

If we can embrace that reality, as our forebears at other critical economic turning points have done, Maine’s future could be very bright.

Charles Lawton is chief economist for Planning Decisions Inc. He can be reached at:

clawton@planningdecisions.com.

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