In 1989, Maine’s per capita income ranked 28th nationally, a watershed placement reflected upon by economists as a period of prosperity. Mainers’ incomes fell to 39th in 2006, the lowest ranking since 1985. Actual incomes, however, were steady; only the ranking moved, as other states outpaced Maine’s growth.

Or, rather, its lack of it.

“There was no significant change in this measure,” the 2008 Measures of Growth report said about income. “As other states have experienced income growth Maine has slowly moved away from the national average.”

This is the backdrop to a difficult question: Are state workers paid too much? After all, private sector workers in Maine, as reporter Kathryn Skelton wrote on June 15, earn 76 cents for every dollar paid to state employees.

Only four states have a gap this severe, which is a choice target for disgruntled taxpayers. Mixing Maine’s near highest-in-the-nation tax burden with loftier-than-average state salaries makes quite the combustible cocktail.

Bloated state salaries may be frustrating, but they are only part of the problem. Maine’s lower-than-average incomes are at the core of the state’s high tax burden and private-public salary inequity.

Finding a solution to these realities is difficult. Replacing the higher-salary manufacturing jobs that propelled Maine’s prosperity in the 1980s – but are now disappearing – is maybe the most vexing problem facing the state.

Taxpayers have paid millions into economic development programs; some successful, some not. Big firms have come and gone. Entrepreneurship is alive and well in Maine (where 1 in 11 people are self-employed) but this hasn’t made incomes rise.

State worker wages, through union contracts and other benefits, have grown outside the upheaval in the Maine economy. Yet Maine is still firmly in the mediocre – 26th in the nation – in what it pays its state workforce.

For a state 28th in per-capita income, having the 26th highest-paid workforce seems fair; but when per-capita income dips to 39th in the country, as it now has, the disparity is disconcerting.

State compensation could be trimmed in certain areas. Asking state employees to contribute more toward their health insurance, for example, is one idea, and the subsequent savings could offset the taxes that have been raised to fund a certain subsidized health insurance program.

But cutting salaries and benefits, whether in the public or private sectors, is an action of desperate times. Doing so might create equity with private jobs, but this is not a recipe for prosperity.

So, the real question is, what will make Maine prosperous?

If history is an indication, it will be when all Maine incomes are ranked 26th in the country, not just its state employees.