An Agenda to Grow Maine's Economy

Mayors' Coalition on Jobs and Economic Development2015

Cities of the Future

CITIES OF THE FUTURE

An Agenda to Grow Maine's Economy

The future of Maine's economy is inextricably linked to its cities. Maine cannot prosper unless its cities prosper. A lot of good things are happening. Maine's communities are growing in the 21st Century, seeing an expansion in jobs and economic activity along with growing population. You can see it in Portland's vibrant Old Port and world class restaurants, in the redevelopment of mills in Biddeford/Saco, Lewiston, and Sanford, and in the Waterfront Concerts in Bangor. These developments are evidence of the vibrant economy and culture of Maine's cities.

The economic challenge facing Maine is our limited work force. Economist Charlie Colgan concluded in October of last year that "everything depends on migration. Without more people, Maine steadily declines." The best way to attract new residents is through attractive and livable communities. This paper outlines a state-local partnership to achieve that goal.

Attractive and livable communities share a variety of traits. They must:

Be ConnectedBe Where People Want to BeBe Where People Want to LearnBe Financially Affordable and ViableBe Welcoming to New Residents

What follows are a number of proposals designed to achieve these goals.

These proposals were developed by the Mayors’ Coalition on Jobs and Economic Development. The Coalition was formed in 2012 and includes the Mayors of eleven Maine communities. The purpose of the Coalition is to advocate for state policies that will grow Maine’s economy statewide by providing the infrastructure, skilled workforce, and reasonable tax rates necessary to support such growth. The Coalition brings together the Mayors of Auburn, Augusta, Bangor, Biddeford, Gardiner, Lewiston, Portland, Saco, Sanford, Waterville,

and Westbrook. This is a bi-partisan group that represents municipalities with a combined population of just under 275,000.

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Be Connected

Communities must be connected. That means connections both physical and virtual. The Coalition supports policies to improve Maine's transportation network, including public transportation, and our connectivity to the rest of the world.

Broadband

Maine has fallen behind the rest of the country in the quality of our internet connections. A January 2014 article by J. Craig Anderson in the Portland Press Herald stated "Maine ... ranks 49th among 50 states for its quality and availability of broadband Internet access."

A North Carolina study by Strategic Networks Group concluded that, for that fast growing state, "one in five jobs created in 2010 was directly attributed to broadband." More broadly, the McKinsey Global Institute concluded that between 2004 and 2009, 21% of economic growth in developed economies was attributable to the internet. Ready access to world-class broadband is necessary for growing companies and lack of that access will prevent Maine from competing for new businesses.

The Mayors' Coalition endorses the following recommendations to improve broadband service:

1. Set a state broadband capacity goal that is tied to economic development;2. Educate and encourage municipalities to invest in municipal fiber networks (Coalition

members are actively pursuing this); and3. Invest State of Maine funds in strategic broadband projects.

The Coalition encourages legislators to make improving broadband a major goal of the 127th Legislature.

Transportation

Maine has a large transportation network to maintain. Maine DOT does an admirable job with available resources, but there are unmet needs that must be addressed. The Maine DOT Work Plan for Calendar Years 2015-2016-2017 identified an annual gap of $119 million in Maine's

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highway and bridge needs and available resources. The Coalition encourages the legislature to pursue all available options to provide for a sustainable transportation network.

A strong transportation network is essential for a strong economy.

Transit

A flexible and viable public transportation system is increasingly something that potential residents, especially young people, expect as they decide where to live. Transit is essential for seniors for whom driving is no longer an option. Increasingly, residents of all ages are interested

in high density neighborhoods where they can live vehicle free.

Unfortunately, Maine's public transportation network often falls short of the standards delivered elsewhere in the country. MaineDOT is currently preparing a Transit Strategic Plan, to be released this spring. It is expected to document the limitations of Maine's

current system and to contain two recommendations strongly supported by the Coalition.

First, the creation of a Public Transportation Advisory Group (PTAG) to bring together representatives of state departments, consumers, and providers to develop the best possible transit network in Maine. This will continue the productive collaborative process used in developing the Strategic Plan. Second, a modest increase in state support for transit.

Be Where People Want to Learn

The members of the Mayors' Coalition know that strong and vibrant school systems are key to the prosperity of our communities, now and in the future. The 127th Maine Legislature is positioned to take action on a variety of topics in ways that will strengthen our schools and help build successful Cities of the Future.

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Helping Maine Students Excel

A strong economic future for Maine will require that we give every student the opportunity to excel and nurture our most talented students. There are a number of ways the 127th Legislature can create that opportunity. The Coalition would recommend a commitment to the following:

1. More AP classes. Let's challenge the best students and allow them to get a leg up on their college careers at the same time.

2. Commit to making foreign language and music available to all. The creative talents they inspire and the cross-cultural relationships they enable will be increasingly central to economic success in coming years.

3. Expanded access to higher education for high school students. The Rural U run by University of Maine in Fort Kent clearly demonstrated that getting students engaged in college courses early increases the likelihood they will continue and complete a college degree.

4. Expand access to virtual education, which can expand the course offerings available to all students.

5. Expand the curriculum on finance and business. Students should emerge from high school with an understanding of the financial realities of business and with the ability to manage their own finances.

6. Provide year round school opportunities. Interested students should have the opportunity to grow and develop their intellects year round.

Skilled Workforce

The 126th Legislature did commendable work at identifying and addressing the major challenges in providing a skilled workforce for Maine. The steps they implemented, including additional funding for the Maine Community College System, with a focus on in-demand skills like machining, and for the University of Maine System were thoughtful and helpful. But more needs to be done and the Coalition encourages the new Legislature to continue working on these issues.

Funding - Title I

The members of the Coalition house many of the most successful businesses in Maine. But many of our residents are not financially successful. Over the last half century, high earners have left our communities for the lower cost suburbs. Recent research conducted by the Maine Service

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Center Coalition (MSCC) demonstrates this clearly. The MSCC determined that Maine's 70 service centers host 77% of Maine jobs and generate 81% of taxable retail sales, yet contain only 47% of Maine residents.

And many of those residents are low-income. This can be clearly seen in the percentage of school children receiving free and reduced lunch in Coalition communities. The state average is 47%, but the rate for Coalition communities is 55%, with a high of 69% in Waterville.

Title I is a federal program created with the express purpose of assisting school districts with the highest rates of poverty. Most Coalition schools receive Title I funds, but due to a quirk in the state funding formula, this federal assistance is deducted from their state school funding. This needs to be fixed both because Maine's low income students deserve it and we need to comply with the intent of federal law.

School Construction

The State of Maine reviewed applications for new school construction in 2010-11 and developed a priority rating list of 71 schools. To date, only the first 12 schools on the list have moved forward. The Coalition would encourage the Department of Education and the Legislature to approve moving forward more quickly with the remaining schools on the list. Too many students and

teachers are working in inadequate, unsafe, and/or outdated facilities.

Local Share of Teacher Retirement

Historically, the state has taken on certain burdens related to school operations. When the state added teachers to the state retirement system, it committed to covering the full cost of the retirement system for current teachers. This is a commitment the state kept, in good times and bad, for many years. Unfortunately, the most recent budget abandoned that principal, shifting $15 million in costs to school districts. The 127th Maine Legislature should undo that step.

Charter School Funding

All school districts struggle with appropriately funding K-12 schools. The 127th Legislature can ease this burden by eliminating one of the major uncertainties school districts must struggle

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with - the number of their students who will attend a Charter School. That is because, under current law, the school district must send a check to a Charter School for every student from their geographic region who attends that Charter School. In reality Charter Schools, which are authorized and regulated by the state, are paid for by local school districts. That is not fair and it must change.

Charter Schools should be funded directly by the state. The Coalition was pleased to see unanimous approval of legislation to accomplish this in the Education Committee.

Be Financially Affordable and Viable for Residents and Businesses

Recent changes in state support to municipalities have created a great deal of uncertainty for Maine businesses and other property taxpayers - in other words, for everyone in the state.

The 127th Legislature needs to put an end to the roller coast and provide businesses with some property tax rate certainty. And that means providing revenue certainty to municipalities, especially those communities that are already struggling with a high demand for services, a large number of tax exempt properties, and high property tax rates.

The Legislature can provide that certainty by committing to fully fund revenue sharing. If that is not achievable, the Legislature must provide communities with the tools necessary to stabilize local property tax rates. There are a number of ways to reach that goal, but the time for talk is long past. In 2015, the Legislature must act.

The Coalition recommends consideration of the following options to stabilize the property tax:

1. Revenue sharing at 5% (it's the law).2. Local Option Sales Tax. Approved at the municipal level with revenues split between the

taxing municipality and other communities in the same County.3. General Assistance. The state should take over the management and funding of the

general assistance program. Municipalities have generously underwritten these costs for years, even as the state continually plays with the terms of the program. It's time to move on. LD 632 will enact this change.

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4. Fire Service Fee. Coalition members host the largest tax exempt organizations in the state. These include state government, major hospitals and other health care providers, and social service agencies. Under current law, many of these entities pay nothing to local government for the public services they receive, including roads, public safety, and fire protection. A basic fire service tax that apportions the cost of fire service among all property owners on a per square foot basis would assist communities while fairly distributing this cost. This proposal has been presented as LD 724.

Maine's cities are seeing population and economic growth. Both trends will be negatively impacted if action at the state level forces property tax increases and drastic service cuts in our communities.

Be Welcoming

"Everything depends on migration. Without more people, Maine steadily declines...." Charles S. Colgan, Director, Maine Center for Business & Economic Research, Muskie School of Public Service, September 30, 2014

Professor Colgan could not be more correct. His message was repeated by State Economist Amanda Rector before the Appropriations Committee in November, 2014. Maine is the oldest

state in the nation. To grow our economy we need to add more young and educated people. This means attracting young Americans from the other 49 states, and attracting and developing the skills of legal immigrants from around the world.

The Mayors' Coalition supports policies to attract those young people from around the country. That means marketing Maine outside the state,

appealing to out-of-state students in Maine's many outstanding colleges and universities, and building on efforts to assist young people staying or moving here by addressing burdensome college loan costs.

We support policies that welcome legal immigrants and help them quickly become productive members of the community. That means more English as a Second Language (ESL) courses, employment assistance, and help securing licenses to apply the trades and professions they practiced in their home countries.

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Conclusion

Maine's largest communities are experiencing a period of welcome growth in population and economic activity. We are an engine for statewide growth and can do even more working with state government. Together we can attract the new workers Maine needs, grow businesses here in Maine, and better connect Maine communities with the rest of the nation and the world. The Mayors' Coalition looks forward to working with Legislators to build the Cities of the Future.

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