Maine’s Legislature should focus on jobs

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Recently, Gov. John Baldacci and Democratic legislative leaders unveiled two bond packages to promote job creation. These proposals move in the right direction, but should go further.

In a recession, consumer spending and business investment plummet, leading to massive job losses. In the short term, those jobs can be replaced if public investment increases, through borrowing or through raising revenue in ways that do not further depress private spending and investment. If the public investments have high rates of return, they also make the economy more productive once it recovers.

The two bond proposals rightly emphasize high-return investments in energy efficiency, transportation and public infrastructure. A closer look at the benefits of energy investment shows how bonding can strengthen an economy over the long term.

Energy efficiency represents one of Maine’s best economic development opportunities. Most buildings, from homes to industrial facilities, could reduce energy consumption by more than 30 percent. Efficiency costs less than one-third as much as generated energy, and if Maine made every building 30 percent more efficient over the next decade, there would be savings of $8 billion to $10 billion during two decades and 10,000 jobs created.

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Unfortunately, numerous market barriers prevent residents and businesses from investing in efficiency. That’s why public grants, loans and technical assistance are essential to build the new energy economy.

The bond proposals take modest steps toward realizing the possibilities in Maine’s energy future. The legislative proposal emphasizes efficiency in schools, colleges and universities, reducing governmental and educational costs while creating good-paying jobs.

The governor focuses on industrial efficiency grants, creating jobs while keeping our manufacturers competitive. The governor also rightly prioritizes further research and development investment to make Maine a center for wind turbine component manufacturing. The benefits of harvesting Maine’s wind resources will be comparatively modest if Maine cannot leverage those resources to create good-paying manufacturing jobs.

Unfortunately, neither bond helps Maine’s residents invest in efficiency.

Opportunity Maine is a partner in a federal stimulus-funded project in Penobscot and Piscataquis counties to replace old mobile homes with small, efficient homes. This project will provide safer homes for some of Maine’s poorest residents and help them make ends meet, save money and spend more in the local economy, while creating good-paying building trades jobs and on-the-job training opportunities.

A bond issue could bring this economic, work force and community development model to other job-starved areas in rural Maine.

The proposals should embrace other policies to spur efficiency investment and job creation.

Raising efficiency standards for existing public and higher education buildings would prompt public colleges and local and county governments to hire energy service companies (ESCOs) to make efficiency improvements. These companies can provide financing, and a performance-based contract can ensure that the ESCO only gets paid if energy savings occur.

Public entities could receive technical assistance from the Efficiency Maine Trust to ensure that taxpayers get a good deal. The end result would be significant taxpayer savings, injection of more private capital into the economy and thousands of jobs created.

The governor and the Legislature should also ensure that public funds create jobs for Maine people, not out-of-staters. There should be a much stronger contracting preference for in-state workers, and in counties with high unemployment, the state should require best efforts to hire within the county where work is being done. Contractors should be required to coordinate with on-the-job training programs and make best efforts to hire from disadvantaged populations, including the long-time unemployed.

The state should also invest directly in our workforce, ideally by putting a one-time injection into Maine’s Competitive Skills Scholarship Fund. The fund helps low-income Mainers get education and skills training in high-wage, high-growth jobs. A recession is a perfect time to help laid-off workers earn certificates and degrees that will help them achieve self-sufficiency. Increasing our work force’s education and skill levels is the best way to strengthen our economy.

Ultimately, the 2,000 jobs that either bond package would create will make a difference, but Maine has lost more than 25,000 jobs since the recession began, and would have lost thousands more without the federal stimulus. Maine bonds less than almost any other state, and that positions us well to use bonding more aggressively now to create jobs and to pull Maine out of the recession with a stronger economy.

Unfortunately, Maine has done the opposite of what it should since the recession began, focusing on cutting public investment at a time when plummeting private investment was destroying thousands of jobs.

It’s time to get Maine’s economy back on track.

Clifford Ginn is co-director of Opportunity Maine in Portland, a nonprofit organization that promotes economic security and sustainable development through innovative investments in the education and skills of Maine’s work force.

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