Posted on 05/27/2005 10:10:27 AM PDT by Fido969
Friday, May 27, 2005
Executives give state's economy failing grade
By EDWARD D. MURPHY, Portland Press Herald Writer
Copyright © 2005 Blethen Maine Newspapers Inc. E-mail this story to a friend
Maine business executives have a dour view of the economy, the business climate and the state's ability to tackle economic problems, a new study of senior managers in the state has found.
"The results are not very encouraging," said Verne Kennedy, whose Florida-based Market Research Insight company conducted the survey of 502 business leaders for the Maine Economic Research Institute. "From the employers' perspective, they're giving the economy an 'F.' It's the worst of all (the states) we've surveyed."
MERI, a conservative business group, has conducted the "Senior Management Survey" three times since 1999 and shares the results with state officials, business groups and the public. The sample includes a healthy number of small-business owners who often lack a voice in statewide matters, said Edward J. McLaughlin, president and chief executive officer of the institute.
"The larger companies tend to have a bigger voice because they can hire" people to lobby on issues that matter to them, McLaughlin said. "The mom-and-pop companies are just keeping their head above water."
That is becoming increasingly difficult to do if the survey - which has a margin of error of plus or minus 4.5 percentage points - accurately reflects conditions.
The managers surveyed said the business climate in Maine, already bad when MERI conducted its first survey, has only gotten worse.
In 1999, 78 percent of those surveyed said Maine's business climate was somewhat or much poorer than the climate in other states or Canada. In this year's survey, that number had grown to 94 percent.
None of the executives thought the state's business climate was much better than other states or Canada and just 2 percent thought it was somewhat better.
Those surveyed blame business taxes, a lack of skilled labor, and high costs for health care, energy and workers' compensation insurance, among other factors, for the bleak situation.
The few bright spots in the report included Maine's quality of life and the work ethic of Mainers, both of which drew positive remarks from the executives.
Also, Maine's primary education system was cited as one of the most positive influences on the economy, and Kennedy said that runs counter to findings in most of the other 24 states where he has conducted surveys.
"It's unusual for public education to make the top 10," he said, because business leaders in other states perceive the schools as performing poorly.
McLaughlin and Kennedy said the numbers suggest that business executives don't think elected officials will do much to help the situation.
Only taxes, and the cost of health care, workers' compensation and energy were bigger drags on the economy than the Legislature in a ranking of positive and negative influences, the survey found. And the governor's office has tumbled from the seventh most positive influence on the economy in 2002, when Gov. Angus King was in office, to 27th in this year's ranking and closer to the bottom than the top.
"There's a disconnect" between political leaders and business leaders, McLaughlin said.
McLaughlin said his conversations with business executives suggest that they are leery of political leaders' motives because they see few of them as having any business experience. Legislators, he said, are well-intentioned, but they fail to realize that a lack of consistency in lawmaking hurts business confidence.
McLaughlin noted that almost every session, there is an attempt to repeal a tax break for business equipment purchases.
"Every year, there's a battle," he said. "That's the kind of uncertainty that doesn't bode well."
But Senate President Beth Edmonds, D-Freeport, said MERI ignores the fact that the tax break has been preserved and officials are considering steps to make it permanent.
She characterized MERI as a "Republican think tank" that skews the results by the sample it selects and the way the questions are framed.
"There's no getting around it," Edmonds said. "Everything they look at is through that lens."
Some Maine businesses recently received cuts in their workers' compensation premiums, she noted, as Portland was named earlier this year as the leading city in the country as a place to start a small business. (This week, Inc. magazine ranked Portland 15th among medium-sized cities on its list of top places to do business.)
MERI's survey "is like a cloud of negativity that comes out, and I don't think that helps business in Maine," Edmonds said. "You know how it feels to have gloomy weather and if you have a gloomy prediction from these people all the time, it makes you gloomy."
Kennedy, however, said the pessimism is widespread and not just a temporary depression.
"It's not just small business or large businesses, it comes from everyone," he said. Business executives feel as if they're "going uphill all the time and pulling too heavy a load."
"You're not at the breaking point yet, but you're close," he said.
McLaughlin said he's not as pessimistic as Kennedy and said the survey's results could lead to some positive changes.
"We shouldn't shy away from negative information," he said.
McLaughlin noted that Maine still attracts people and businesses with its quality of life and its well-regarded work force. But it needs a more positive relationship between lawmakers and business officials to fully capitalize on those attributes, he said - and perhaps a frank assessment of the current status of that relationship can lead to steps to improve things.
"We're trying to fix it," he said. "Short term, I'm not very optimistic, but long term, I am."
Staff Writer Edward D. Murphy can be contacted at 791-6465 or at:
emurphy@pressherald.com
Every time the lousy business climate this is pointed out the Dims just take up the same tired old refrain: "You aren't helping the state by pointing out how bad it is for business!"
Cripes, yes, but we didn't make it that way, dims - YOU did.
They're doing a LOUSY job, and get PO'd if anyone even dare call them on it.
Could be worse. You could live in NYS.
True, but at least New York has an economy.
Pard, that would be news to a lotta folks Upstate :(
When I was a kid, we downstaters used to refer to upstate as "the igloo."
LOL. I won't print what I use :) I hope one day to see Upstate secede and form a new state, maybe taking some of the red bits of PA with us. We could be New PA. Or Penn York. I don't care.
Aura you manufacturing are berong to us Chinese.
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And Other Observations
I have a cousin who was a Board of Education member for the largest public school district in Maine, and she thinks the primary education system sucks. It really does. Computers per pupil ratio is one of the lowest in the country, and they couldn't even find competent computer teachers because the pay scale was so low.
I'm afraid there are too many newly-arrived rentiers influencing policy. The whole southern coast is full of elegant houses, restaurants, and art galleries.
I'm afraid there are too many newly-arrived rentiers influencing policy. The whole southern coast is full of elegant houses, restaurants, and art galleries.
A few months ago, I read an article that said the fastest growing "industry" in Maine is social services. And what pays for those services? Taxes! Not good for the state's economy.
Gosh, socialism doesn't work there either? I'm shocked!!
Things are hopping here in Fla.
Judging by the son et lumiere outside my window a while ago, things were hopping here, too =80
I have a friend near saratoga who is alway complaining about the ecomony there - and of course "it's all Bush's fault." When I point out her company has increased sales 4 fold and her salary and bonuses keep going up she just stares at me like I am talking Greek or something. Good Lord, man, I'll take Saratoga to anyplace in Maine for a thriving area.
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