September 28, 2013

Forbes ranks Maine worst state for business for fourth year

Gov. LePage, Democrats trade blame over Maine's poor showing.

Staff report

For the fourth straight year, Forbes Magazine has ranked Maine as the worst state for business.

"Not much has changed," says Forbes' article on the 2013 rankings. "(Maine) is still burdened with an aging population and a weak economic forecast. Job growth projections are the worst in the U.S. and only Vermont is expected to have slower household income growth over the next five years, according to Moody's Analytics."

Business leaders said Friday that Maine continues to face economic challenges but the overall business outlook isn't all negative, especially in the southern part of the state.

Political leaders responded to the listing by once again blaming each other.

Republican Gov. Paul LePage said the new ranking is the result of Democratic policies and resistance to reform, while Democratic leaders said it's LePage who has been a drag on the economy.

Forbes bases its rankings on six factors, and Maine's combined score put it in the cellar.

Maine ranks 24th in Forbes' quality of life category, 33rd in labor supply, 40th in business costs, 43rd in economic climate, 45th in regulatory enforcement and 49th in growth prospects.

"Much of the blame can be placed on the state's high corporate tax burden and lousy job and economic growth forecast," Forbes said. "Job growth is expected to be the slowest in the U.S. through 2017."

Virginia is the best state for business in 2013 because of its business-friendly government policies, strong incentives, educated work force and reasonable business costs, the magazine said.

Virginia also has benefited from federal government spending, which has kept the state's economy healthier than most, according to Forbes.

Dana Connors, president of the Maine State Chamber of Commerce, said Maine has its challenges -- including an aging population -- but advantages such as the quality of its people, products and places aren't always reflected in the rankings.

"I think the message to be taken from this is not to despair or that we're less than anyone else, but to focus on the things we can improve and work on together," he said. "There isn't a state out there that doesn't have problems. Let's market and share with the world all the great things about our state."

Chris Hall, CEO of the Portland Regional Chamber, said people across the state are working hard to create business-friendly communities, and one ranking doesn't tell the whole story.

"I do hope people understand that while much of the state is suffering and deeply in need of economic growth, here in Portland we're a little bit better than 50th. It's a tale of two Maines," he said. "I think the Portland region has an obligation to the rest of the state to ask what we can do to spread that prosperity to all parts of the state."

The annual ranking -- with Maine's consistent last-place finish -- has fueled a running political feud in Augusta.

The governor has blamed decades of Democratic leadership at the State House, while Democrats have blamed LePage for not doing enough to help the state's economy since he was elected in 2010.

LePage used the latest ranking to criticize Democrats' support for wind energy, Medicaid expansion and labor unions.

"After four decades of liberal rule that has burdened Maine with high electricity rates, high taxes, over-regulation and a hostile business climate, it's no wonder that Forbes would put our state at the bottom of the list," he said in a prepared statement Friday.

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