Maine may be open, but where's the business?

Our avowedly pro-business governor, Paul LePage, has attracted plenty of attention while battling with Democrats who control the Legislature, and sometimes with fellow Republicans, too.

But governors standing for re-election are judged at least as much for their handling of the economy as for any specific legislation. And on this account, LePage supporters might want to avert their eyes.

Since LePage took office 30 months ago, Maine’s economic performance has been lackluster – and that’s being charitable. In 2011, the state’s job growth was last in the nation among the 50 states. In 2012, it improved – to third worst.

But economies can grow without necessarily providing new jobs. The national economy began to climb last year, and Massachusetts led New England with a 2.2 percent growth rate. Maine, unfortunately, grew just 0.5 percent -- hard to distinguish from stagnation.

It’s not entirely fair, though, to judge a governor’s performance simply on the state of the economy, even if that’s the first thing voters look at. Decisions that involve a governor’s skills at recruitment of new and expanded businesses may be a better test.

The long, slow decline of Maine’s manufacturing base is the largest reason why it’s lagged other states in income growth, as high-paying blue collar jobs are replaced by much lower-paying service positions.

LePage has had two opportunities to win significant numbers of manufacturing jobs. The first came in 2011, when Kestrel Aircraft was preparing to launch production of a business-class jet after setting up an engineering department at Brunswick Landing. The project had symbolic importance – replacing the civilian jobs lost when the Brunswick Naval Air Station closed would be a high priority for any new administration.

LePage couldn’t close the deal. The 300-600 jobs a Kestrel plant would have provided are now headed to Superior, Wisc.

By most accounts, the administration’s approach to Kestrel was understaffed and poorly organized, but that wasn’t the key reason Maine lost. Wisconsin, with an array of municipal, county and state concessions, provided a much bigger package of goodies.

Kestrel may in fact be a bargain-hunter; its proposed groundbreaking in Superior has been delayed more than a year. So while it’s unfortunate the opportunity was lost, the responsibility doesn’t rest solely with the LePage administration.

The same cannot be said for the recent set-to with Statoil, the world’s largest producer of offshore wind turbines. Statoil has worked partly in collaboration, partly in competition, with the University of Maine, and both the Norwegian company and the Maine university are recipients of federal grants to test offshore turbines. There only seven grants, and no other state received two.

The two grantees are taking strikingly different approaches to a much larger federal grant to build full-size wind generators offshore. Statoil is using existing technology, with steel platforms and towers, in a new setting. The university is trying to leapfrog current models with an all-composite turbine mounted on a floating concrete base, which it believes will dramatically lower costs.

The university can proceed without reference to the market. Statoil, a for-profit company, cannot. Thus it sought, and received, a contract from the Public Utilities Commission to sell power from its turbines to Maine utilities, a $200 million, 20-year deal.

That’s when LePage got involved. Even though one of his own PUC appointees had voted for the contact, he decided it must be scuttled. He used the omnibus energy bill to make his case, but failed, and the bill was passed over his veto.

But he did manage to convince two veteran Democratic legislators, Rep. Barry Hobbins and Sen. John Cleveland, who co-chair the Energy Committee and who ought to have known better, to carve out the Statoil deal and reopen the bid process. That bill passed over the objections of Democratic House and Senate leaders.

Two days later, Statoil withdrew from its commitment.

Offshore wind is not just any old business opportunity. It may represent Maine’s key competitive advantage, capable of providing enough electricity to power much of the Atlantic seaboard. That, in turn, could mean a manufacturing industry with several thousand jobs – something Maine hasn’t seen since the paper industry’s heyday.

LePage stopped the industry in its tracks through a fit of pique over the price the PUC approved – even though the contract amounts to much less than 1 percent of the electricity Maine will consume over the contract period.

LePage’s motto is “capital goes where it's welcome and stays where it's appreciated.” But it’s only appreciated when it fits the governor’s mood of the day.

Kestrel flew away under its own power. But Statoil? This one’s on Paul LePage.

Douglas Rooks is a former daily and weekly newspaper editor who has covered the State House for 28 years. He can be reached at drooks@tds.net.

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Comments

Steve  Dosh's picture

Maine may be open, but where's the business?

Doug , Monday 18:50 hst ?
" LePage couldn’t close the deal. "
The guy's a buffoon . He's all about Paul and Paul alone . Need another toothpick factory , Mainers ? Shoes and boots or boos and shoots ?
/s, a former palette maker who worked for Bob Brackett ( Leeds ) who moved - o u t - Dr. Dosh , HI u s a

Roger Moulton's picture

This comment thread is quite refreshing.

I think this is the first anti-Lepage article in the Sun Journal where there were more comments supporting him than against him. First, shame on the Sun Journal once again for publishing this rubish that is obviously just here to mislead (in my opinion) idiots like Kim Waite. Wind power sucks, it's inefficient in every sense of the word. I work in the power industry and wind power is nothing more than a very expensive joke played on us inadvertantly buy the tree huggin' Green folks. But really Kim why would you try to crap on the Governor draining of Flagg Staff(positive towards energy pricing) in an article that is making a poor attempt at knocking his energy policies? Did you give any actual thought to the content of the article or to what you were saying? It is clear to me that Kim Waite is one of the folks who gets all kinds of free stuff based on some made up mental health issue that she learned how to be diagnosed for. I'm glad the governor is taking away some of that help that all you couch riders have been stealing from our paychecks for years. Thanks to all others that commented with some facts and actual intelligence. Oh and to the Sun Journal bleep you for using your paper for politcal advancement of the pansiecrat party that has driven this state into it's current position. You spend 30 years pounding a state into the ground and expect the governor to turn it around in just a couple years? WAKE UP MAINE, YOU CAN'T FIX SOMETHING THAT'S BROKEN BY REPEATING THE STEPS THAT BROKE IT IN THE FIRST PLACE!

You're in the power industry?

Which segment are you in that you feel so threatened by wind power? Hydro, coal, oil, or natural gas?

Roger Moulton's picture

I have worked in

Biomass and Natural Gas. Wind Power doesn't threaten me, with either source I can make a lot more power for a lot less money. Way to present some facts to back your argument Wayne.

I wasn't presenting an argument

I was only asking a question. You're the one who got defensive.

 's picture

No Segment

I am in no "segment". But I happen to be highly knowledgeable about concepts like energy density, capacity factors, and the economics of the electricity grid. Wind power is a huge failure on all counts. Sprawling industrial wind sites destroy our mountains for a folly that wouldn't exist without unduly favorable subsidies, tax schemes and heinous arbitrary mandates known as RPS. Instead of accepting 20+ years of wind industry propaganda, look into facts that show wind power clearly is a loser. www.windtaskforce.org

 's picture

Fact, Opinion or Rhetoric?

It's unfortunate that so many reporters in Maine media do so little homework about the facts-- relying instead on political or idealogical partisanship and rhetoric.

Mr. Rooks can do better than this.

And as a respected reporter, he should.

The real facts are out there, if only one cares enough to look for them.

Respectfully,
Karen Pease
Lexington Twp., Maine

It's an opinion piece

See? Right there at the top of the page: OPINION. Do you complain about Poliquin's rightward partisan pieces in the Perspective section too?

Roger Moulton's picture

No I do not complain about Poliquin's pieces.

But you just made me realize that's because I haven't seen one. I usually only click on articles that this website shows on the first page and of course they are Lepage haters and probably make those articles viewable only if you search for them.

Mark Brennick's picture

This is exactly why Lepage is

This is exactly why Lepage is trying to control spending.We need to stop feeding the goverment monster.

 's picture

Another LePage Hatchet Job

Doug Rooks is just another tax & spend left winger out to disparage the Governor. LePage is far from perfect. I have cringed over some of his remarks. What he HAS DONE, however, is change the good old boy & gal liberal domination in Augusta. He has people talking (and squabbling). He also has followed through on pledges to cut taxes and tried damned hard to address Maine's business climate. Although Liberals won't face the facts, pushing expensive wind power on to Maine businesses is an expensive disincentive for keeping business or expanding business.

Regarding Kestrel, Mr. Rooks at least acknowledges that the company is a business whore that still hasn't started up even with Wisconsin giving it a hugely generous package. Those jobs would never have materialized in Maine, either.

Regarding Statoil, the PUC should have rejected their outrageous costs per kwh. As a resident of this state, I don't want to see ratepayers pay for a huge corporations experiment. That company has the wherewithal to go ahead with the experiment to see whether or not floating turbines is a cost competetive investment. I believe they already know it is not---without unduly generous tax subsidies, guaranteed usurous rates like the PUC approved, and heinous arbitrary renewables mandates known as RPS. I'm glad the Governor called their bluff and Rep. Barry Hobbins and Sen. John Cleveland, who co-chair the Energy Committee should be thanked, not condemned for their action.

 's picture

some comments

Can anyone name one company...just one...that was coming to Maine and then changed their minds solely because of LePage's behavior? In the meantime, I can start listing manufacturing companies that left this state because of the foolish taxes, operating expenses and issues with labor.

Statoil is backing out because of the re-bidding process, which access their sham power purchase agreement, not because of his attitude or comments. The bidding process was a sham. A PPA at 30 cents per kilowatt hour with annual price increases should have been criminal.

Can you name any who have

Can you name any who have COME to Maine because of his supposedly pro-business policy?

 's picture

jobs

Maine is seeing a growth in medicinal marijuana growing. Not because of the governor's choice, but because citizens worked and worked to show the legislature the pros of a farming community in Maine..

LLBean, tourism, is a viable business and Made in Maine will make the difference. NOT WIND turbines...
Made in China is not gov Lepage's doing.

That still doesn't answer my

That still doesn't answer my question...

 's picture

jobs

Maine is seeing a growth in medicinal marijuana growing. Not because of the governor's choice, but because citizens worked and worked to show the legislature the pros of a farming community in Maine..

LLBean, tourism, is a viable business and Made in Maine will make the difference. NOT WIND turbines...
Made in China is not gov Lepage's doing.

Roger Moulton's picture

Way to deflect the above comment.

With zero argument for your side. Wayne you have come to a battle of brains unarmed!

 's picture

No business will be able to

No business will be able to afford off shore wind, or on shore wind for that matter, when the subsidies dry up and the true costs are revealed. Energy costs DO make a huge difference in the bottom line of any business. Jobs might be created during hte building phase of this wind industry, but if businesses fold because they have to shoulder the burden of the energy cost, to say nothing of the average rate payers misery, what have we gained?

Kim Waite's picture

No one in their right mind

wants to support the Blaine House Monster while he's running our state. This is why he and the Koch Brothers haven't seen an uptick in businesses being opened here. He's turned off Maine and the whole country. I can't wait for him to be gone!

How many out-of-staters or people of Maine are happy with how our guv'nah just laughs and turns his back on the people of Eustis when Flagstaff Lake is drained on behalf of his beloved Florida power company?

The guv'nah hates Maine. Why would anyone want to do business in a state run by a man who just left the bar after an all-nighter only to give his finger to the beauty of our state!

 's picture

Way off base, Kim

It is nice that the First Amendment allows you to vent your venom. The Governor is no monstoer and if people would look closely and listen to some of what he says, he is a populist. He constantly speaks about the regular people of the state. It is why he wants to change the tax burden and why he wants to stop electricity prices from going sky high . The Koch Brothers have nothing to do with the dynamics of Maine.

Regarding Flagstaff Lake, the decision to impound the Dead River was to provide flow control for the Wyman dam, downstream on the Kennebec. It is the largest source of hydro power in the state. It has operated in this way since the project was built. Anyone who wants to turn a man-made lake into a recreation area has to realize that there may be times when the draw down creates changes in the lake.

Lastly, your final comment regarding the Governor has no basis in fact and exemplifies what is wrong with politics these days. Conservatives never attacked Baldacci the way Liberals have attacked LePage. Have some respect. Disclosure: I am an enrolled Democrat, but not very pleased with my party these days on any level.

Yup, he's a populist

He speaks out in favor of the "average joe" taxpayer out of one side of hius mouth while with the other he's telling his cronies int he GOP to yank the rug out from under that same average joe. Plausible deniability. Rail about not increasing taxes while pushing a budget that will force most localities to raise their mil rates. Speak out against bullying and then (illegally) telling unemployment hearing officers that they need to decide in favor of business more often in a closed door meeting. Talk about being an advocate for education while vetoing legislation that increased funding for education. Talk about wanting to create more jobs and make sure we have a ready workforce but veto bills that would have provided training funds.

Yup, he's got that populist fraud thing working really well.

Roger Moulton's picture

You Lose, give up

You know what, most localities should keep their mil rates based on what that locality decides they want to provide. Why should the state determine which locality gets what? And as far as Unemployment I know two people close to me, one got it when in all reality they quit, and the other lost their job for behavior that would cause anyone to lose their job, and behavior that individual is truly ashamed of today, and they both easily won their hearing with the labor board. Legal or not what Lepage said was the truth. And that is the problem with this country and state all the pansiecrats and minorities try to abolish truth by claiming someone is offended or some law is broken. If the truth offends you....GOOD! And you all complain about taxes the above vetoes you speak of would have RAISED taxes. You can't just keep dishing out money and then ask why your taxes are so high. Well you can but it just adds more proof to your stupidity that your posts have already clearly proven.

I didn't realize this was a contest.

Right now, we're all losing.

He was not speaking the truth about unemployment, It is public record that less than a third of hearings are decided in favor of the former employees. That means business wins almost 70% of the time. Given that record, if there's a company that loses nearly all the time (Argo Marketing comes to mind -- Jason Levesque claims losing 40 out of 40), then there's a better than average chance that the company is doing something wrong. He said he'd gotten "hundreds" of emails complaining about this. An analysis of the emails obtained in response to an FOAA request showed that of the 350 received, 85 were from companies complaining about the process going against them. More came from former employees complaining the process was against them. But most complained about the process itself (too slow). So that was a lie from your "Mr. Teller Of The Truth".

Most localities were having trouble funding their needs WITH revenue sharing, mainly because of no-tax absolutists like you and Gravel who don't seem to think the towns should be funding education or roads or public safety. So your statement holds no water. They will have to raise the mil rate or they will have to do serious damage to their infrastructure and quality of education.

For the record, I'm not a Democrat. Lefties offend me as much as righties. I am not an idealogue but I have very strong feelings about what I feel is right. I know this confuses people like you who deal only in absolutes and think we independents are jellyfish.

Kim Waite's picture

LOL

The republicans under Baldacci loved him? Really? What rock do you live under,because I need to turn it over so you can get some fresh air! Seriously, you have never listened to Mike & Ken in the morning or read comments (even today!) online about Baldacci by the neck-drooling-knuckle-draggers-who-support-The-Blaine-House-Monster?

The Blaine House Monster is a monster. Prove to me he isn't. He loves the little people so much he's cutting any help they're getting from the state! He also hates people who need mental health services too. He's just so nice! Not. He's a monster....oh wait!....he loves the oil pipeline and allowing out of state companies to drain lakes in Maine to use!

The Blaine House Monster wants to make Maine into a cesspool. The End.

 's picture

You are so Filled with Hatred

You are so Filled with Hatred and that is a major part of what is wrong with the political system these days. Calling people names doesn't help. As for me, I have lived in and loved and promoted our beautiful state for 63 years. I have participated and contributed much through those years, so I don't need your snide remark about coming up for air or living under a rock. How about contributing something of substance to this discourse? From my perspective, Gov. LePage has been a fresh air blowing out the staleness of essentially one party rule throughout the King and Baldacci administrations. He has succeeded in stirring things up and offering a different way to get Maine moving. Could it be that a state with lower taxes, that lives within its means, and that solves the high energy cost and business overhead dilemma while maintaining natural resource integrity can become more prosperous?

Kim Waite's picture

I see you're still under that rock!

I have a ton of hatred for the Blaine House Monster. It equals the hatred put forth by the neck-drooling-knuckle-draggers who hated Baldacci. See? Where's your outrage about the hatred Baldacci received for years, Hypocrite?

The Blaine House Monster is stirring things up in support of Big Business for the Koch Brothers. He doesn't care about Maine or the little people in it.

Maine will not prosper with a Monster running it. The End.

 's picture

There You Go Again

Kim, if your remarks weren't so outrageously pathetic, they would be laughable. Especially your reiteration of the cliches, which does nothing to provide credibility. Did you miss my disclaimer that I am an enrolled Democrat? My critique of government and the forces at play are quite even handed because I delve into public policy with an open and analytical mind, not locked into ideologic doctrine. If there was more of this, moderates from both parties and the large group of unenrolled independents would find common ground to move Maine and our country forward.

Kim Waite's picture

LOL

First off, please leave the Democratic Party and two: name one thing that the Blaine House Monster has done that has positively effected our state and the people in it (the majority that is....not just for the low number of wealthy at the top).

Thanks, Smartest Guy In The History Of The World!

FRANK EARLEY's picture

LePage makes decisions like.................

LePage makes decisions like he's a blind judge in a beauty contest. He makes his choice, but has no idea of what he's voting for. As long as he is allowed to be a dictator when it comes to public policy. He makes these gut decisions with little or no input from experts, or it would seem, as most of his decisions are blatantly wrong. His temperament keeps him from rational thought, the damage is usually done by the time someone explains the mistake to the Governor. He then turns around and does it again. His biggest enemy is himself, until he admits he doesn't know all the answers, these ass backward fiasco's will continue. He just doesn't know when to shut up...........................

Gail Labelle's picture

Maine may be open, but where's the business?

Simply I am not an expert in this field, however I recently lived in another state who promoted and reaped the benefits of Foreign Investment .

To name a few companies who set up shop in this State: BMW, Bridgestone Tire Group, Zurich Insurance, Continental tires and Au'Some Candy. I do not believe it is our energy costs that is the problem. I strongly believe that many years ago we needed to move from a Textile mentality to more high tech industries.

Changing our tax structure would help. This state authorized counties, cities and school districts to impose a ad-valoren taxes on real and property taxes.

Not the answer by far for Maine but as a resident of this state I watch my property taxes go down from Maine's $3500 a year $741 instead. I witness companies setting up shop like Google and others bring jobs to the citizens of this state. I saw a reduction in the cost of energy, such as heating, electricity and fuel for cars.

I do not see the need for the "blame game" here, what I see is a call to action and a change in the mindset of all concern here in Maine. Just my humble opinion .....

CLAIRE GAMACHE's picture

Instability

Since Lepage has become the governor the State of Maine has reneged on pretty much every promise it has made to cities, schools, colleges, seniors, retirees, businesses, workers, environmentalists, lumbermen, etc. Any business thinking of making a substantial investment in this state that requires any governmental cooperation whatsoever would be crazy to even consider it as long as he is in office. All the excuses about energy costs, taxes and untrained workers are just that hot air and spin. The rest of the states have all those things but they don't have a government that spins on a dime every time the governor gets an email.

Mark Elliott's picture

When is the media going to

When is the media going to discuss that fact that businesses wont come to Maine largely due to energy costs. When should we discusss the 100 megawatt cap on fosil fuels in Maine, legislation lobbied by the wind industry during the King reign? When should we discuss the money King made off the wind industry since then? When should we discuss why the heck we put King back in office??

LePage tried to get cheap Quebec power to come to Maine, but they wouldn't come because of the 100 megawatt cap! Can't blame them, It isn't good business. Maine's wind industry wouldn't have a snowball's chance in hell if it weren't for the unfair regulation of the fossil fuel energy put in place by democrats.

Other businesses won't come primarily because of the cost of energy in Maine. Why does the average 3 bedroom home here spend 85 bux a month for electricity while similar homes in other parts of the country pay 35 bux for the same amount of energy? If you were a manufacturer, spending a million bux a year on energy elsewhere, why would you voluntarily move to Maine when your energy expense is guaranteed to be double?

This is what happens when you try to control a free market. WE pay the price every time. WE are smarter than this! It's time to review some of the regulations put on us here in Maine. We cannot rely on tourism anymore. Tourism should be our gravy!

Gerry Thompson's picture

Wind

power has been lining King's pocket and Baldacci blatantly contributed to the amount King was.is making, one has to ponder what's in it for Baldacci. You only need to go to one major city (Boston/New York) to see we can never send them enough power. Those windmills may as well be pinwheels and were never anything more than a grab for Federal money

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