Gov. Paul LePage on Wednesday told a crowd of 100 people that a Forbes representative told his office the state must cut spending, reduce energy costs and address structural problems — which LePage interpreted as "welfare" — or the state would continue to be "in the cellar" of the magazine's rankings of the best states for business.
Forbes says it told the governor's office no such thing.
"I certainly didn't say anything about welfare costs, which has nothing to do with the ranking that we do," said Forbes senior editor Kurt Badenhausen, who spoke to the governor's office when it called the magazine. "I didn't tell them they needed to reduce energy costs. I told them, basically, the best thing they could do, and that any local government could do, was just to try and create more jobs."
A memo sent last week to LePage from his senior economic policy adviser backs up Badenhausen's version.
Badenhausen, who worked for more than three years at Financial World magazine before joining Forbes in 1998 as part of the statistics department, is the editor responsible for Forbes' business school rankings, the America's Best Small Companies list and the annual Best Places for Business rankings. He confirmed he spoke with someone from the governor's office recently, but he adamantly denied telling anyone that Maine must reduce energy costs and spending if it wants to improve in the ranking. Welfare, he said, isn't considered in Forbes' rankings and Maine isn't alone in its energy costs.
"Energy costs are high across the board in New England, and that's a fundamental reality for businesses in the Northeast. That's a hard thing to fix," Badenhausen said.
To come up with its rankings, Forbes considers 37 points of data in six categories: business costs, labor supply, regulatory environment, economic climate, growth prospects and quality of life. This year, Maine ranked 44th in business costs, 28th in labor supply, 45th in regulatory environment, 42nd in economic climate, 50th in growth prospects and 17th in quality of life. Overall, Maine ranked 50th for the second year in a row.
LePage commented on the ranking Wednesday during a town hall-style meeting at Mt. Abram High School in Salem Township, near Kingfield. He said he wanted to know why Maine did so poorly, "So we asked them."
"They said, 'You made some efforts and you've done some good things in some areas, but you absolutely ignored the structural problems.' Which are our welfare and our energy. We did nothing," LePage told the crowd. "And they said, 'Unless you get your fiscal house in order, and you address energy, you address work force development, and you get yourself (so) that you spend within your means, you're in the cellar.' This mission here this year, you're going to hear an awful lot of education, energy and the economy. Unfortunately, we're starting out with welfare, because we're going broke."
LePage spokeswoman Adrienne Bennett said Thursday that the governor meant welfare in general — as in the state's welfare or Mainers' welfare — and not the welfare system, when he spoke of welfare being a structural problem and addressing welfare "because we're going broke."
She said his comments had nothing to do with his proposed $220 million in cuts to the state's MaineCare insurance system.
Bennett said the governor got his Forbes information from his senior economic policy adviser John Butera, who spoke to Badenhausen. But the memo Butera sent to LePage last week contained no quotes from Badenhausen, offered no advice from Badenhausen, did not suggest the state ranked poorly because it ignored structural problems and did not mention welfare — either the welfare of Mainers or the state's welfare system.
The memo told LePage that Maine improved in three categories: business cost, regulatory climate and economic climate. It said Maine worsened in two: labor supply and growth prospects.
Although Butera told LePage that "there is still significant room for improvement as the (business cost) analysis includes taxes, labor and energy costs," he said Badenhausen "basically indicated our overall ranking was due to the dismal, five-year outlook on job growth coupled with low projected population growth."
Bennett said the governor based his Wednesday comments solely on the memo.
"It was the governor's take on it," she said.
She could not say why the governor appeared to quote Forbes when no such quotes were available.
"Our staff, you know, talked to them," Bennett said. "So, I think he started out saying, 'They said,' and then he kind of goes to his thoughts, then he goes back to 'They said.' It's just the way he speaks. The more one-on-one time you get with him, you understand these things."