PORTLAND – State and local government costs Mainers $14.98 of every $100 they earn, the sixth-highest rate of any state, according to a report released Wednesday.

Envision Maine, a nonprofit think tank, offered ways to cut government spending and hopes the report will become a hot debate topic in the governor’s race.

The bottom line?

The group says it found $1 billion in potential spending cuts that Maine could reinvest in other areas.

“When you look at Maine spending on government and compare us to the nation and other rural states, Maine spends over a billion more than those other states,” said Alan Caron, co-author of “Reinventing Maine Government” and founder of Envision Maine. “That’s a huge amount of money.”

Maine spends more than the average for rural states on K-12 education, welfare and Medicaid, corrections, fire protection and the Legislature, according to the report.

And it spends too little on higher education.

Envision Maine, founded in 2009, is based in South Freeport. The group was hired by GrowSmart Maine, another nonpartisan think tank, to prepare the report. It was funded by donations from individuals and businesses including Wright Express, Hussey Seating Co., J.S. McCarthy Printers and former Republican gubernatorial candidate Bruce Poliquin.

The report comes four years after GrowSmart Maine issued another report intended to drive debate in the 2006 election. Lawmakers, candidates and others often quoted “Charting Maine’s Future” in discussions about the state economy, quality of place and sprawl.

That report also recommended a deeper look at government functions, from the state level on down. Caron, who left GrowSmart to focus on the new report, spent more than two years examining state, county and municipal governments, and spending on schools.

He hired David Osborne, co-author of the New York Times bestseller “Reinventing Government,” to help write the report.

Osborne said Wednesday that Maine is similar to many states that are struggling to balance budgets. But beyond the current recession, the state must be concerned with debt that’s accumulating from the retirement system ($4.4 billion), escalating health care costs and an aging population, he said.

Most alarming to him were test scores from 2009 showing only 37 percent of Maine’s eighth-graders tested as “proficient” in reading. Maine taxpayers spend more than they should on K-12 education, but they aren’t getting results, he said.

“In terms of Maine’s future, that is the worst statistic in the report,” he said. “The quality of your work force is the most important determinant of your future economic growth.”

The report also calls for reducing the size of the Legislature and limiting the number of bills that can be submitted each session. Lawmakers have rejected both ideas in recent years.

Also, the report says the state should cut the number of counties from 16 to eight, and should create a single board of trustees to oversee the university and community college systems.

Osborne said growing economies across the country — in Massachusetts, North Carolina, California and Texas — rely on “a technology university” to anchor growth.

“Maine doesn’t have a great technology university,” he said. “You under-invest in public higher education, you don’t have a great private technology university, and it leaves you out of a lot of the modern economy.”

Many candidates said they liked at least some of the ideas in the report and that once they’ve had more time, it will likely become part of the debate leading up to the Nov. 2 election.

“It’s just absolutely what we’ve been standing for,” said Paul LePage, the Republican nominee. “I really think there’s tremendous opportunities and that’s what we’re all about, finding where the fat is.”

A spokesman for Democrat Libby Mitchell said she, too, has an interest in making government more effective and efficient.

“The report has many of the same goals that Libby would have as governor,” said David Loughran, who said the campaign needs more time to look the report in detail.

Independent Eliot Cutler also said he found useful information in the report.

“‘Reinventing Maine Government’ is a timely and thoughtful report that forcefully makes the case for changing the way we govern ourselves and allocate our financial resources. It sounds the alarm, dispels myths and offers a bold plan of action that all of us should carefully consider. This report will have a prominent place on my desk when I become governor,” Cutler said in a statement.

Independent Kevin Scott said he hasn’t yet read the report and independent Shawn Moody said at first look, many of the ideas seem viable.

“We’re really excited about it,” Moody said. “We think it’s great. A lot of those bullet points are spot on.”

Caron said he expects some criticism of the report, but that he hopes it sparks debate in the governor’s race and beyond. He said budget-balancing tactics lawmakers have used in recent years, such as unpaid days off for state workers, won’t help in the future.

“We are way beyond tinkering,” Caron said. “We are way beyond furlough days, across the board cuts. We really have to get to some tough priorities.”

MaineToday Media Writer Susan Cover can be contacted at 620-7015 o0r at:

scover@mainetoday.com