December 12, 2012

Maine ranks the worst for business – again

In Forbes' annual "Best States for Business," Maine ranks last, worse than Rhode Island.

By Jessica Hall jhall@pressherald.com
Staff Writer

For the third consecutive year, Maine ranked No. 50 in Forbes seventh annual "Best States for Business."

click image to enlarge

In this Friday 2011 file photo, an "Open for Business" sign beneath the "Welcome to Maine" sign along Interstate 95 near the New Hampshire border in Kittery. For the third consecutive year, Maine ranked No. 50 in Forbes' seventh annual “Best States for Business.”

AP File Photo

The best state in which to do business? Utah.

According to Forbes, Maine's problems in attracting business were varied and deep, with problems stemming from the state's high corporate tax burden -- the second highest in the country -- as well as high energy costs and the oldest state population, with a median age of 42.

The state's projected growth rate of 2.5 percent is the fifth worst, and its job growth forecast of 1.4 percent ranks fourth from the bottom, Forbes said.

Maine also is headquarters to few corporations, and home to none of 1,000 largest U.S. companies, Forbes said.

"I am disappointed but not surprised," said Gov. Paul LePage. "We will continue to be on the bottom of the barrel until we make structural changes."

LePage won election two years ago in large part on a promise to improve Maine's economy and attract more businesses to the state. The slogan, "Open for business" became his mantra, appearing on signs on the Maine Turnpike and on the state's website.

LePage said that he has long advocated for changes to improve Maine's economy. Democratic leaders say he's moving in the wrong direction.

"This ranking shows that the priorities and distractions of the last two years aren't working," said Senate President Justin Alfond of Portland. "We need to have a laser focus on improving our economy and the real factors that impact business, like workforce development, education, improving our infrastructure and investing in research and development."

House Speaker Mark Eves, D-North Berwick, said in an email, "The rankings underscore how important it is for state leaders to get to work on real policies that strengthen Maine's economy and rebuild our middle class. The policies of the past two years have not worked. We must prioritize short-term and long-term job creation to help create greater economic security for Maine people."

Forbes compiles its rankings based on six factors: business costs, labor supply, regulatory environment, current economic climate, growth prospects and quality of life. The study incorporated 35 data points, with business costs weighted most heavily.

"We've got to get serious about lowering energy costs, improving education and paying our bills," LePage said. "These are the areas we need to focus on to better the lives and opportunities of all Mainers."

LePage is no stranger to the annual list. Last year, when Forbes released its list of worst states in which to do business, LePage told an audience at a town hall meeting that Forbes had told his administration Maine had a problem with welfare and energy costs.

Forbes published a response saying the writer never said that, and that welfare was not one of the metrics used to compile the rankings. LePage said the writer told him Maine had "structural problems," which he took to mean welfare and energy costs.

Dana Connors, president of the Maine State Chamber of Commerce, said that rankings such as the Forbes list often fail to recognize efforts to improve the business environment.

"If these studies and comparisons serve a purpose to motivate a state to do better, then they serve a purpose," Connors said. "What worries me is the labels that are applied -- the best or the worst -- is that part that is most troubling and most repeated."

Connors said one issue raised by Forbes, the aging population of the state, needs to be explored and addressed by the state over the next several years.

"There's a lot to promote in the state: The quality of the people, the quality of the place and the quality of the products," Connors said.

Staff Writer Jessica Hall can be contacted at 791-6316 or at:

jhall@mainetoday.com

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