SOUTH PORTLAND — Maine is a puzzle to me, of the economic variety. As an economist who has moved here recently, I’m in the process of piecing together the different bits of information I encounter.

Last week, Gov. LePage in his inaugural address made several points that didn’t fit neatly into a coherent whole. My curiosity piqued, I did a bit of research.

 Welfare reform was the first issue Gov. LePage addressed. In most states, state expenditure on welfare payments makes up less than 2 percent of the total budget. Maybe Maine is different, I thought.

But no – it turns out the figure here is 1.4 percent, or $45 million of the total $3.2 billion budget. (The $45 million includes the state share of basic assistance under Temporary Assistance for Needy Families, $31 million, and the state share of General Assistance, $14 million.) About 6,600 families are receiving benefits – all in all, just a modest program. Why the emphasis on welfare reform and not on, say, reducing the number of persons in poverty, currently at about 161,000? My guess: “politics.”

 Job creation is always a political priority. For this, the governor emphasized the need to improve education and to bring down energy costs.

Maine does well on high school graduation rates, and students here score higher than the national average in the National Assessment of Educational Progress. Students in some grades placed 11th and 12th in math and science out of 50 states. Not bad, but a better-educated workforce would be a major plus for economic development and jobs.

As to energy costs, the price of energy in New England is among the highest in the nation, even though Maine has the lowest retail energy prices in the region. Maine would indeed benefit from lower energy costs, but job gains are less likely to be in manufacturing than in “green energy” and other high-growth sectors. Manufacturing productivity has increased to the point that nationally the percentage of workers employed in that sector has dropped to 8 percent; in Maine, the figure is 9 percent.

Most living-wage jobs being created now are in service jobs related to health, telecommunications, information, green energy, investment, design and marketing, transportation and tourism. Regions that are innovation centers for these industries are well-poised for the future.

The demand for low-cost, renewable energy sources guarantees that the “green” energy sector will remain a high-growth one. With a bit of digging, I determined that Maine has the potential to become a leader in this field. The state has several energy initiatives in renewables, including harnessing the ocean’s tides.

In 2013, over half of Maine’s net electricity generation came from renewable energy resources, with about 29 percent from hydroelectricity, 25 percent from wood/biomass and 7 percent from wind.

 Taxes. What politician doesn’t like to cut taxes? Low taxes on profits are a plus for business, but more important by far is achieving those profits in the first place! Well-spent taxes can ensure that businesses have the infrastructure and skilled workers they require, and that they have access to the knowledge that can help them address the challenges they face.

Low taxes are not important to outdoor enthusiasts, who will continue to come here because taxes have been wisely invested in protecting the beauty and natural resources of the state.

Retirees similarly value services and amenities that are affordable and accessible more than lower taxes. This is not to deny that certain tax breaks could be a useful tool in attracting retirees, but targeted tax incentives are far more effective in achieving desired goals than are across-the-board cuts.

And let me add a note regarding LePage’s proposal to lower income taxes and raise sales and property taxes. This would increase taxes on the poor and the middle class, while reducing taxes on the wealthy. The wealthy would then presumably have more to invest, but unfortunately their preferred investments for some time now have been in financial markets – investments that do not generate jobs.

For over 20 years, I did the Mississippi state economic forecast. Let me assure you that Maine is not at the bottom of the economic barrel.

While Maine is not as prominent as it was during the seafaring era, Mainers remain a remarkably hardy, resilient and resourceful people – certainly a people capable of the disciplined cooperation needed to thrive in the face of today’s challenges.

— Special to the Press Herald