Maine State of the State Address 2002
01/22/2002
Mr. President, Mr. Speaker, Madam Chief Justice, members of the 120th Legislature, and citizens of Maine. Before I begin let's remember that one of the members of the 120th Legislature, Senator Joel Abromson, is not with us tonight. Shalom, Joel, we already miss you.
We come together tonight in this historic room to enact a ritual of democracy, a ritual that is being played out in the next few weeks in statehouses across America, as well as in our Nation's Capital. It is a moment for us to reflect upon our times, to take stock of our accomplishments, to take the measure of our challenges.
Much of what I offer tonight will be in the here and now, but our eyes must also be on the future -- not just next year, but a dozen years from now, as we contemplate a Maine of opportunity and widespread prosperity, a Maine of health and vitality, a Maine of community and character.
My first duty tonight is to report--quite literally--on the state of the state, and, under the circumstances, it's good. I won't minimize the difficulty of our times, but we've certainly seen worse--and many of our neighbors across the country are seeing worse right now. While other states are stalling, some even going in reverse, Maine is still on the move.
As we approach the issues I will discuss tonight, we must hold to the one central, immutable and enduring principle that governs both individuals and societies: that the future is ours to make. By our actions and choices over the past few years, we have already done much to set ourselves a course to this prosperous, healthy, and civil Maine.
As we navigate rougher waters, our Maine vessel is sound and seaworthy; if our people are strong and united, we will not only ride out the squall, we will reach the destination stronger and all the better for the journey.
Seven years of collaborative effort has brought us to a place where we are, in an economic sense, less vulnerable and more resilient. These accomplishments are the buffer against today's challenges, and our springboard past those of tomorrow.
First, we have a straightforward state budget. The fiscal gimmicks are gone: no GPA pushes, no shutdown days, no furlough days, no temporary surcharge on the income tax, and no temporary increase in the sales tax. And it took a lot of work by everybody in this room to make this happen.
In terms of employment, we're doing pretty well -- and considerably better than much of the rest of the country. Yes, we've certainly had layoffs, and there will undoubtedly be more before this downturn is over, but our unemployment rate is still close to 4%, while the national average is approaching 6%. Over the last seven years we have added more than 75,000 new jobs net of any losses, an amazing 225 new jobs a week, week in and week out for seven years.
And over the last several years we have reversed course in an important respect: today more people are moving into Maine than moving away. In fact, during the first year of this new century, nearly 9,000 more people moved here than left us. This is a sign of the underlying strength of our economy and of the natural attractions of Maine. It is especially encouraging in view of the fact that New England as a whole saw net out-migration. And over the last year Maine was in the top half of the fastest growing states in the country. Maine is still moving, and in this case they're moving in.
And not only jobs and population are up; both personal and family household incomes are on the rise, with the latest figures showing our real median family incomes increasing by 5.1%, which was the fourth highest rate of increase in the country. That's Maine on the move in the right direction; our challenge is to keep it going.
Our work to increase incomes while at the same time steadily reducing taxes is starting to pay off. Again, according to the latest figures, the tax burden in Maine has actually declined by 9% in the last four years.
And here's a major new tax cut that not everyone knows about. Because we had the foresight to build up and restructure the unemployment fund during the late nineties when times were good, the unemployment tax -- which hits every employer in Maine, large and small - just this month went down by an average of almost 30% across the board, a savings of $45 million a year which goes right to the bottom line of the Maine economy.
While other states have struggled with energy restructuring, we've gotten it right and now have the most competitive electricity market in the nation. In most categories electricity prices are coming down. For example, in Bangor Hydro territory, residential, commercial, and industrial rates are all headed down, by between 12 and 20%. Lower prices statewide mean that Maine ratepayers will save more than $200 million this year on their electric bills.
We have also literally been building the foundation for future prosperity and better public service. In the mid-nineties, we faced a massive infrastructure debt in schools, prisons, roads, bridges and public buildings. And make no mistake about it, this was debt just as sure as our bonds debt that had been building up over 40 years and simply had to be paid. And we stepped up and paid it.
What's happened in the rebuilding of this state's infrastructure over the past five years -- with the support of this Legislature and its predecessors - is nothing short of amazing and is a critical component of our ability to meet the challenges of the new century. Here's a partial list:
Bridges - We have cut the backlog in half since 1995. The Casco Bay, Merrymeeting, Don Carter, Penobscot, Hancock-Sullivan and Sagadahoc, the engineering marvel that spans the Kennebec at Bath that has eliminated, not reduced, but eliminated one of the worst traffic jams in Maine, are now all in service, with Fairfield-Benton under construction and the Augusta third bridge commencing this year.
On the road side, with strong support from this Legislature and the voters of Maine, we are now delivering the strongest highway reconstruction program in twenty years. This year we finish four years early, by the way the complete upgrade of Route 9 from Brewer to Calais, the vital link to Downeast Maine and the Maritimes. Vincent Tamarro in Baileyville has found that his fuel trucks are saving an hour and ten minutes on a round trip to the Bucksport terminal. Downeast is still east, but it's no longer so far down.
And none of this happened by accident; it took dedication, creativity, and leadership on the part of the DOT project development team, which by the way, is 21% smaller than seven years ago, but delivering 57% more projects.
And don't forget our newest piece of transportation infrastructure, the fabulous Downeaster, the first passenger train serving Maine for almost forty years. If you haven't tried it, you are missing a treat -- no Boston traffic, no hassle with parking, and kids go for half price. If I sound like a salesman here, I am -- if we don't use it, we'll lose it.
Corrections--we, those of us in this room, including especially the members of the Criminal Justice Committee, recent past and present--have done nothing less than completely reinvent the corrections system in this state in the space of four years, starting with a new state prison at Warren, finally replacing the one in Thomaston that had seen an incredible 178 years of service. And the new facility will be so much more efficient to run than the old one that even with vastly expanded programs in substance abuse, education, and mental health services--it will save the taxpayers almost twenty dollars a day per inmate or about six and a half million dollars a year.
Then come two entirely new youth centers--one in Charleston and one in South Portland, with first-class facilities, new programming, and incredibly dedicated staffs. I made a rash promise four years ago during some pretty dark days at the Maine Youth Center: that we would turn it around and we would build--not only out of bricks and mortar, but from a new attitudea model youth corrections system, one that will break the heartbreaking cycle of recidivism. Although we've still got a ways to go, I'm proud to report that as of tonight, we're closing in on that goal.
And again, this didn't happen by accident; it took dedication, creativity, and leadership. And there's no question that it wouldn't have happened without one of the best people I have ever worked with, Marty Magnusson.
Another department that has seen dark days is Mental Health, now BDS, the Department of Behavioral and Developmental Services; the progress here has been no less striking than in Corrections.
We have finally put together a true community-based mental health system, with quality resources available in every region of the state. This takes but a moment to say, but it has taken years to build. And, after years of lawsuits and tragedies, a decline in spirit as well as space, AMHI is finally being replaced after 160 years, and in a matter of days, we will be filing our notice of compliance with the consent decree, a giant step toward the lifting of AMHI's decade of court supervision.
And how about this--tonight, I'm announcing that a partnership has been signed with Dartmouth Medical School that will make AMHI a teaching hospital, which will improve our ability to recruit psychiatrists, nurses and other clinical staff and give us access to the resources of one of the country's leading medical schools. From the site of tragedy to a first-rate teaching hospital: this is an incredible accomplishment.
This transformation simply would not have happened without a dedicated staff and a wonderful leader, Lynn Duby.And what about the building we're in? Talk about an unpaid bill, it has been transformed over the past three years from an embarrassment -- there's no other word for it -- to a place worthy of the great people of this state.
On top of all this, we've reclaimed the historic buildings at Oak Grove-Coburn as a new Criminal Justice Academy, completely renovated the State Office Building, and embarked upon by far the largest capital investment in K-12 school facilities in the state's history. One person more than anyone else has contributed to the success of these projects and that's Janet Waldron, Commissioner of the Department of Administrative and Financial Services.
We have also launched higher ed learning centers in Millinocket, Houlton, Dover-Foxcroft, Bath, and Oxford Hills and developed a community college system, this time without bricks and mortar, which right now is providing a pathway to prosperity to more that 1,000 of our citizens.
And last year alone, 100,000 people used the services of our twenty-three new one-stop Career Centers that have replaced a hodgepodge of eighty different job training programs.
There is another piece of infrastructure that we've been building, too, and this one is our ticket to the next phase of economic life in Maine. It is a brand new capacity for research and development R & D that will lead to the production and marketing of products in biomedicine, marine technologies, shipbuilding, advanced wood materials, sensors, software, foods, and products and services that today we can hardly imagine.
In fact, state investments in research and development have gone from a total of $2 million in 1994 to an astounding $32 million this year. A lot of money for a small state? Absolutely. But already it is paying dividends. The University of Maine last year crossed the $50 million threshold in research activity for the first time in its history, and research labs and industries from Caribou to Franklin to Eliot are creating jobs based upon this initiative and thereby securing the future of Maine.
Maine has also experienced progress in the health and strength of our people. We've gone from one of the highest to one of the lowest teen pregnancy rates in the country, have achieved the highest childhood immunization rate ever recorded in the country, driven youth smoking down 36% since we began our attack on this plague almost exactly four years ago, reduced the number of families dependent on welfare by half, achieved one of the highest rates of children with health insurance in the country, and the nation's highest rate ofhigh school graduation. And we're going to keep moving on all of these.
We've taken on the challenge of prescription drugs, one of the nation's biggest health care problems. While everybody else has been talking about this, we've created the Healthy Maine Prescriptions Program, one of the most effective discount initiatives in the country 108,000 Maine people are now benefiting from 25% discounts at every single drug store in the state! And we've successfully implemented the practice of prior authorization promoting sound and effective prescribing practices in the 4 million prescriptions Maine Medicaid pays for each year, an initiative that saved the taxpayers $15 million last year even while covering 400,000 more prescriptions.
And, our financial commitment to education is yielding some of the best results in the nation. Our public school system is consistently in the top five in America by every measure leading with performance on national exams in reading, writing, math, science; leading in personalizing education with one of the smallest class sizes in the country; leading in efficiency with one of the highest proportion of dollars spent that actually go right to the classroom. My budget maintains our commitment to education and I am delighted we are united on this issue.
But the state of the state is not all good; our nation faces the scourge of terrorism and a weaker economy. It is to these areas that we now must turn our attention.
First, homeland security. Let's pause momentarily to reflect on the tragedies of September 11th and all that has transpired since. Our fellow citizens, our government, our brave public servants police, fire, EMTs, military service men and women, airline employees, we mourn their losses and say a deep and prayerful "thank you" for their courage and selflessness.
To ensure that we are better prepared to defend against another attack on our homeland, I will first be joining with Attorney General Rowe in offering a package of initiatives to strengthen our security laws.
Second, I will be proposing a $10 million bond issue to enhance state and local preparedness. Our national defense team now includes the Army, the Navy, the Air Force, the Marines . . . and the Waterville PD. If we are going to ask our towns and cities to join in fighting this war, we must see that they have the resources to do so.
It is not just our homeland, but in our private homes that we must be secure. Let's support the unanimous recommendation of the Commission to Study Domestic Violence and give the courts the authority to prohibit the possession of firearms by those subject to temporary protection from abuse orders. This isn't gun control, its common sense.
Although we have made critical investments in the State's infrastructure, our service center communities also face a challenge maintaining their aging infrastructure upon which we rely for our most basic needs as well as for economic development. Seventy percent of Maine's jobs are based in service centers.
It is critical to our economic vitality that we help our service center communities help themselves by enacting a carefully shaped bill for a limited local option sales tax one that it is narrowly limited in amount and duration and laser-beamed at capital investments with regional economic benefit. I'm the last person to suggest we should raise taxes, but the alternative here is local debt, supported by local property taxes. If narrowly limited, and this bill is, this is an idea whose time has come.
We will also have an opportunity this session to put before the voters a bond issue to accelerate our economic recovery. The $36 million bond issue I will propose will replenish the Economic Recovery Loan Fund and the Regional Economic Development Revolving Loan Fund, both successful programs administered by FAME, redevelop the abandoned naval facility at Schoodic Point, create the Maine Rural Development Authority to boost hard-hit rural economies, and capitalize the Municipal Investment Trust Fund. Now is the time to make investments such as these in Maine and its people.
Even if we do all of this and more, there are more fundamental challenges facing us and our successors. It's to three of these issues -- the looming crisis in health care, the building of a stronger statewide economy, the maintenance of the essential nature of Maine -- that I would like to turn.
All of these, in one way or another, relate to healththe health and vitality of our economy, the health of our Maine sense of communityand our personal health.
The underlying message here is the samethese are tough challengescomplicated and fraught with the potential for political conflictbut the key to their resolution lies in our hands. Nothing is written in the stars here; nobody in Boston or Washington is going to give us the answers.
The first of these overarching issues is the incredible recent escalation in the cost of health care, an issue that, barring another terrorist attack, will come to dominate the politics of this state and this country for the better part of the next decade. There is no more complex, difficult, or important issue before us.
We must look at all components of the problem quality care, cost, access if we are to make any headway toward solving this emerging crisis. And what we can do right now is take a clear look at the problem and try to identify some guidelines for the coming debate.
Here's where I start- First, we need better information. The Blue Ribbon Commission that reported to us this time last year made an important beginning, but we still need a better understanding of what is driving the costs and where ours may depart from the rest of the country.
How much of the problem is the cost of prescription drugs? How do our hospital charges compare with those in other states and as between each other? What savings can be had by simplified administration? The new Health Care Performance Council can help provide some answers to these and other questions, so we can base our policy prescriptions on facts instead of emotion and anecdote.
Second, there is no simple answer to this problem and anyone who suggests as much is kidding themselves as well as the public. During the debate on the Single Payer bill last year, I received e-mails urging me to support "free health care." Well, not much is free these days and "free" health care-paid for by taxes and rationing of services--could well turn out to be the most expensive option of all.
If we're going to consider some form of single payer system-which I think would be almost impossible for us to implement in isolation from the rest of the country-let's face the costs as well as tout the benefits.
Third, we're all paying the current health care costs, whether we know it or not. One of the realities of the present system is that we're mostly shielded from the costs because someone else-Medicare, Medicaid, or private insurance--is paying the bill. And in most cases, we don't even see the premium bills, which is a second layer of insulation from the true costs. But the money for these premiums is coming out of our hides one way or another because premium increases are eating up whatever resources might be available for raises or other benefits.
I had an employer in my office not long ago in agony because he couldn't carry his health insurance costs any longer. Family coverage for his administrative assistant had gone from $600 a month a couple of years ago to $1,033 today. That's over $12,000 a year just for health insurance, or $6 an hour for an employee earning $10 an hour in wages. This is absolutely unsustainable.
Fourth, we have to become better consumers. Another of the unintended consequences of the present system is that most of the consumers of the service-that's us-are pretty much indifferent to the price.
Who can tell you the room rate in their local hospital? The cost of setting a broken arm? An MRI in Bangor, Augusta, or Boston? Can you even find out these figures if you try? Who cares, as long as someone else will pay? At the very least, let's make sure this information is public and available.
As I mentioned, we are paying. But until we start paying attention, until we start asking questions, the costs will continue to rise just as surely as the tides in Penobscot Bay. Questions like - Is there a generic drug that will work as well? Does the hospital a few miles down the road have equivalent quality and better rates?
Fifth and finally, we have to take control of this issue in our own lives. Unlike most others engaged in this debate, I don't think it's really all about who pays or whether we have private insurance or a government program. The simple fact is that no matter what the payment mechanism, a huge part of health care costs today which we've all paying, don't forget are avoidable and until we get a handle on this, we're not going to make much progress.
We're in the middle of a slow-motion chronic disease epidemic in this country and four diseases-cardio-vascular, cancer, chronic lung disease, and diabetes-cause three-quarters of the premature deaths in Maine each year.
What do these diseases have in common? They all relate, in whole or in part, to how we treat ourselves. Sure, sometimes they're unavoidable; I had cancer at twenty-nine for reasons they never figured out. But reliable estimates tell us that 50% of these diseases are preventable with good nutrition, a little exercise, and no cigarettes.
The savings? About a billion dollars a year, just here in Maine. That's more than the entire proceeds of the income tax; almost twice the sales tax; enough to build an east-west highway every year; or just leave a thousand dollars a year in the pockets of every man, woman, and child in the state. You get the idea-it's a lot of money and right now, we're leaving it on the table, and unfortunately, it's often the operating table.
And this is just the economics; the personal benefits in terms of healthier and longer lives are, as they say in the ad, priceless. I could bury you in figures here cancer rates, heart disease, the phenomenal growth of diabetes but just let me leave you with one in the period from 1985 to 2000, obesity among children nationally increased 100%. That's a medical time bomb related directly to poor nutrition and a lack of exercise among kids, mind you that is set to go off just when the wheels start coming off us baby-boomers.
It's a health care and economic perfect storm and right now all we're doing is rearranging the political deck chairs.
The second long-term issue I want to discuss is the health of Maine's economy. Over the last several years, Commissioner of Economic and Community Development Steve Levesque and I have made a series of regional economic tours (we were in Somerset County just last week) -- no publicity, no big entourage, just quiet visits with large and small Maine businesses and their workers.
We've seen some of the businesses that actually created the 75,000 new jobs I talked about a few minutes ago, great examples of determination and grit, of businesses swimming against the tide, of real dedication to employees and community. But we've also seen how hard it is on a day-to-day basis to compete, to keep your head above water in an increasingly tough business environment.
By and large, our businesses are making it, but it's close; and this is the message its close, its fragile; it's close because the central economic reality of our times -- the globalization of the economy -- carries with it great opportunity but also great peril. Great opportunity because markets around the nation and the world are open to us for the first time, an antidote to the disadvantage dealt us by our geography; but great peril as well because the competition is so intense, competition coming from corners of the globe we'd barely heard of a dozen or so years ago.
In China, they really do work for fifty cents an hour, so anything we do by hand is at risk. And let me tell you about government support of business. In Maine, we have provided the business equipment tax reimbursement program to level the playing field with other states that had the sense to repeal personal property taxes on machinery and equipment years ago. Unfortunately funding this program is often contentious with lots of grumbling about corporate welfare and the like. I've already started to hear it this session.
Meanwhile, places like China and the Czech Republic are directly underwriting a substantial part of the capital cost of new factories and taking aim at some of our most important and best paying jobs, like paper, computer chips, and software. Or, to bring this competition a little closer to home, let me read you an excerpt from letter to a Maine business from John Engler, the Governor of Michigan. After describing their Renaissance zone program, the letter said if the business moved to Michigan, it "would be exempt from all state and local taxes for fifteen years." That's right, no taxes for fifteen years, no property tax, no personal property tax, no school tax, no income tax on the workers, no corporate tax on the business. Zilch, zero, zip.
And we're wringing our hands about the business equipment program? Give me a break; we can argue forever the niceties of government support of business, but sooner or later, we have to face the reality of the world we live in -- and decide whether we want to have a diverse economy which includes manufacturing or whether we want to be a one-season Bermuda.
In short, the economic growth we have enjoyed is tremendous but it is fragile and can be derailed by misguided state policy. The policies and accomplishments I've talked about matter infrastructure investments, tax cuts and credits, education, R&D but it's not just about having the right policies for a few years.
Consistency and predictability matter too. Anyone who makes a significant investment, whether in their own small business or in a major new factory, looks at the potential for success and the risk of failure. One risk no one likes to take in this life is that the rules are going to change in the middle of the game.
The threat is not that some future Legislature and Governor will pass a single bill that, at one stroke, puts us out of business. It's the death by a thousand cuts we have to fear: little steps -- all well-meaning, none a big deal in themselves -- which, when added together, cripple our ability to compete.
We must resist changes that will increase workers' comp costs, we must continue to work to decrease Maine's tax burden, and we must never return to the days when we taxed investments in the productivity of our own workers.
This isn't about business; it's about jobs, jobs that form the basis of everything else. The surpluses we enjoyed a few years ago surpluses which allowed us to expand health care for kids, build schools, invest in infrastructure and R & D didn't come out of the sky they came from the earnings of those 75,000 new jobs, from the growth in the stock market, and from the profits of our businesses. It's all connected and it all starts with a good job.
The outline of how to make this happen is clear: we must maintain our commitment to education at all levels (yes, including technology in the classroom), never abandon our commitment to growing R & D investments, and government must continue to be a partner and not an adversary in the creation and maintenance of jobs.
Yes, we can and we must regulate-to protect the environment, our workers, and our families and, alas, we must also tax-to support our schools, maintain our infrastructure, and provide health care and necessary services to the most vulnerable of our citizens. But we have to be smart about it and in each case where regulation or taxes are proposed, ask the consequences, weigh the costs-in terms of the competitiveness of our businesses and their workers--as well as the benefits.
I honestly believe that we are at an historic tipping point and that we have it within our power to build one of the strongest economies in the country -- given our natural and human resources -- but doing so will require that think long and hard about the burdens we place on job creation, and keep a careful eye on the competition. It's not north vs. south, labor vs. management, rural vs. urban. It's Team Maine vs. the world, and we can and will win.
But finally, winning won't be worth the price if we don't hold on to the qualities that bind us to this special place and to each other. And it's to this challenge of sustaining the essence of Maine in the midst of economic change that I'd like to turn.
Losing that essence can be as simple as more traffic or the loss of a favorite view or as subtle as a diminished sense of community, but once it's gone, we'll know it and there's no getting it back.
Some of this is inevitable and has already happened. Many of our towns now bear little resemblance to the quaint New England villages they were as recently as twenty years ago. So do we give up? Is this a tide that cannot or should not be resisted? If we really value this place -- and we should for there are few left like it anywhere -- the answer has to be no; we will embrace growth and its benefits but we will be conscious of its pitfalls and smart about its direction and nature.
Here's a stunning fact. The amount of land put into development in Maine in the two decades between 1970 and 1990 was equal to the total amount of land developed in the prior 150-year history of the state. And at current rates we will double the amount again by 2010.
This doesn't mean that we stop growth; in fact, this issue isn't even particularly about growth itself. Especially in the traditional rural regions of our state, our task is to stimulate growth, not stymie it.
But the issue has everything to do with how we grow. If we spread out aimlessly like a jug of spilled water, we lose. Instead of landscapes, we get junkscapes. We have to pay attention to incremental effects and try to direct growth to the places in town where it makes sense -- like downtown. When we have the choice, let's put public buildings downtown as well, as we have with the new DHS and court buildings in Lewiston.
We must also redouble our efforts to sustain our coastal and agricultural communities, to enhance our outdoor sporting heritage, to advance sustainable forestry, to promote industrial processes that protect the environment and to ensure that the next generation will be able to enjoy the lakes, ponds, streams, and mountains that make Maine so special.
But there's a lot more to this than land; it's the intangible quality of civility between neighbors, it's community itself. It's that package of values that developed when we were a state of a few thousand hearty souls perched on the edge of a vast continent, and cooperative action and fair dealing were more necessities than niceties.
It's saying good morning and meaning it; it's letting the other guy in at the intersection (don't try this one in Boston), it's coffee instead of ab
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