While other politicos talk of resuscitating Maine's economy by creating new jobs, Shawn Moody takes a "work with what you have" approach. Rather than dump dollar after dollar into economic development programs that show dismal returns on investment, the state should focus instead on helping each of Maine's 30,000 small businesses to hire one more person, he says. "The small business community in the state of Maine really doesn't have an active voice in Augusta," Moody says in a strong Maine accent, explaining his decision to run for governor.
The founder of Gorham-based Moody's Collision Centers, Moody has grown his business to include five locations and 75 "co-workers" as he calls them, in deference to their participation in the company's employee stock ownership plan. He plans to bring a similar approach to state government through a program he calls "surplus sharing," in which state workers would be rewarded for devising money-saving strategies and best practices. Using that approach and others, he expects to create a budget surplus by 2014, as well as drop unemployment to less than 6%, keep 20% more college graduates in Maine, reduce the high school dropout level by 30%, and have at least eight health insurers available to the state's residents.
Moody's confidence comes in part from a multi-million-dollar deal he struck in 1999 to sell his auto recycling company, Gorham Auto Parts, to LKQ Corp., then a scrappy startup venture but today a chain of 43 recycled auto parts suppliers. Moody bought Gorham Auto Parts, a junkyard full of scrap that the town was preparing to shut down, in 1988 for $250,000. Struggling for name recognition and political success without party backing isn't all that different, Moody says. "You've got to earn your way, just like starting a business."
Kevin Scott, the other lesser-known Independent candidate grasping for a place in the polls, wryly puts his chances at winning the governor's seat at one in five. A Rumford native, Scott founded Recruiting Resources International in Andover in 1998 with a $30,000 loan and today places professionals in jobs with out-of-state tech firms, which Scott describes as an $87 billion annual market. "The world's largest tech companies are my clients," he says, including Texas Instruments and U.A. Systems.
His first order of business as governor would be to revisit the state's decision to stick with ISO New England, the regional electric grid. In 2007, the state estimated it could save $600 million by renegotiating that agreement, and Scott wants to make sure Maine's not missing out on potential savings.
Second on his priority list is reviewing state rules and regulations to eliminate redundancies and outdated requirements, a process that would involve both the private sector and state workers, he says. "The truth is there are a lot of state employees who don't like the situation any better than we do," Scott says. Perhaps the most energetic candidate of the bunch, Scott also plans to institute a 32-hour work week and eliminate furlough days for state workers, as well as pay them on a commission basis, much like Moody's plan.
In order to boost the Maine "brand," Scott says he'll reach out to the country's 20 business-friendliest states to learn about and emulate their success.
While he has some experience in government — he's also chair of the Andover Water District — Scott draws on his business experience in outlining his vision for Maine. "Who out there in business doesn't believe that we need to inject some common sense and some private-sector practices into government?" he asks.
The race to become Maine's next governor has reached a fever pitch, with Republican Paul LePage trying to maintain an early lead while Democrat Libby Mitchell and Independent Eliot Cutler fight for ground. Shawn Moody and Kevin Scott round out the hopefuls seeking to lead the state over the next four years, as a $1 billion shortfall looms and debate over the role of government intensifies. Read on to find out where the candidates stand on business incentive programs, who they regard as private-sector heroes and how they plan to jumpstart Maine's economy.
Background: General manager of the Marden's discount retail chain and mayor of Waterville, LePage, 62, is the oldest of 18 children and was homeless for a period of his childhood. He later earned an MBA from the University of Maine and worked in the lumber and paper industry before founding a private consulting firm, LePage and Kasevich.
First job: Delivering groceries for Roy's Market at age 9
Business hero: Harold "Mickey" Marden, founder of Marden's
It's often said the governor's job is much like serving as "the CEO of Maine." But Paul LePage, the major gubernatorial candidate most aggressively touting his experience in the business world, disagrees. "I'd say chief political officer of Maine," he says, sitting in his Waterville headquarters. Running a private-sector operation like discount retailer Marden's, where he's served as the lead executive for more than a decade, allows for flexibility and quick reactions to one's changing environment, compared to the methodical checks and balances of government, LePage says. Plus there's much lower tolerance for redundant or inefficient practices. "In business, if you don't stay on top of your game and watch your dollars, you go broke."
Marden's has remained financially healthy amid the recession, but competition from Wal-Mart has upped the competitive ante, LePage says. He takes pride that Marden's offers health insurance, retirement and vacation benefits to the chain's 1,200 employees, while describing the average wage of $12 to $13 an hour as "not nearly enough." It covers basic needs for a single, childless adult, but falls shy of the $13.07 each parent in a two-child home needs to earn to get by, according to Maine Department of Labor figures.
Creating more jobs for Mainers will require five steps, in LePage's mind. First is establishing a 90-day review period for new business permit requests, modeled after a Florida program (which initially struggled to gain buy-in from local governments, according to a state report). Second is requiring regulators to prove their policies benefit Maine businesses, and third is requiring job and cost impact studies for all new laws and regulations. Fourth, make health insurance plans offered in other states available in Maine, promote employee wellness and extend to five years the availability of low-cost insurance for new businesses from the current one year. Fifth, institute a $5 filing fee for new businesses wishing to open in Maine.
To help him stay in touch with the business community from the hallowed halls of the State House, LePage says he'll convene roundtable breakfasts with industry representatives — the forest, fishing, agriculture, energy, manufacturing and tourism sectors chief among them — once a month. Small business owners will be first in line for eggs and bacon, rather than lobbyists already well versed in making their voices heard, he says. "The future of Maine is not another National Semiconductor."
The roundtables are part of an ambitious outreach plan that also includes monthly traveling Cabinet meetings and personally hosting open office hours every Saturday from 8 a.m. to noon throughout his tenure as governor, as well as televising legislative hearings and debates.
When LePage talks about cultivating Maine's future business leaders, he references traditional industries, from forestry and wood products to agriculture, fishing and the trades. State statistics, meanwhile, forecast the most growth in fields including health care, technology and engineering. But LePage is confident that after four years of his leadership, unemployment will drop to 4% or less and Maine's per-capita income will reach the national average, provided — and this is a big if — voters elect "like-minded" legislators. "I'm not running for power or control," LePage says. "I'm not running to complete my resume. I am running for the people of Maine."
Background: First elected to the state Legislature in 1974, Mitchell, 70, has served nine terms in the House and three in the Senate, and was the first woman in the country to serve as both House speaker and Senate president. A graduate of the UMaine School of Law and a former teacher, she serves on numerous education and health boards and lives in Vassalboro.
First job: Peach packer at Sunny Slope Peaches
Business hero: Ken Priest of composites firm Kenway Corp. in Augusta
Libby Mitchell points to an anecdote in describing Maine's often burdensome regulatory environment. A construction worker she knows, according to state rules, dutifully followed a maintenance schedule for a fire extinguisher stored in a piece of heavy machinery, ensuring that the equipment was in full working order in case of an emergency. But instead of affixing the log to the actual fire extinguisher, as is required, the worker kept the record in the cab of the machine, she recounts. State regulators discovered the infraction, a fine soon followed, and yet another business suffered at the hands of flawed regulation.
Situations like that have inspired Mitchell's plan to staff the governor's office with "business advocates" who will not only support business owners in their interactions with state agencies, but also assist with permitting, financial assistance and other matters. "If you need to interface with the state for any reason — to open a new business, to expand a business, any kind of state permit, any kind of information — you will have a person assigned to you to help you navigate the red tape," she says.
The advocates would work under a new Office of Strategic Initiatives and Job Creation, the product of a consolidation of the existing State Planning Office and Department of Economic and Community Development, and in conjunction with a business advisory council. But if the regulatory environment improves under a Mitchell administration, would business owners even need those advocates? In a word, yes, she says. "If you want to open a business, you're going to need something from the Department of Transportation — you may need a culvert — you'll need to deal with the Department of Environmental Protection, you may need to have clean water under the regulations under the Bureau of Health within the Department of Health and Human services, you may need financial assistance from the Finance Authority of Maine. So, I see the business advocate also as someone who could help you know what's there to help you."
One of Mitchell's previous attempts to help Mainers backfired with such speed and intensity among business leaders that it became one of the legislative session's most bemoaned proposals. A reaction to the H1N1 outbreak, Mitchell's bill would have mandated businesses provide employees with paid sick days. "It became the rallying cry of something that was seen as anti-business," she says. She still supports the concept, but says she'd now seek tax incentives for business that provide sick time, rather than mandating the benefit. (Her campaign website, however, still describes requiring business to offer paid sick time as "common sense legislation.")
Her overall plan for economic development and job creation calls for expanding FAME's Seed Capital Tax Credit, ramping up home weatherization efforts, requiring 25% of the food served in schools and state facilities be locally sourced, and expanding the Rapid Response program for laid-off workers to businesses seeking to retain or add jobs. After a lifetime of public service, Mitchell believes she's learned a thing or two about what's best for Maine. "I love to listen and learn, and that is an attribute that I have carried with me throughout my public life," she says.
Background: A former legislative aide to Sen. Edmund Muskie, Cutler, 64, is a Georgetown Law School graduate who served under President Jimmy Carter as an associate director of natural resources, energy and science in the Office of Management and Budget. He later founded Cutler and Sheffield LLP, one of the nation's largest environmental law firms, and now resides in Cape Elizabeth.
First job: Cleaning out metal vats in a hospital kitchen and delivering meals to patients at age 15
Business hero: Alan Mullaley, for forging a turnaround at Ford Motor Co., and Steve Jobs, for his seemingly endless ability to reinvent and innovate
Eliot Cutler's first order of business as Maine's next governor would be to embark on a set of reforms even he's skeptical of fulfilling by the end of his term. On day one, Cutler says he'd establish a new state office tasked with reviewing and repealing overly complicated and duplicative state regulations. "My experience is that good companies are willing to meet tough standards," he says, sitting in a sparsely furnished room of his campaign headquarters in Portland. "What they're not willing to do is invest in an environment, in a state where the regulations and rules are administered in ways that don't get them an answer in a reasonable period of time or that get them those answers but not by standards that they understand. They don't like to go where the regulatory environment is unpredictable or unfair."
Such a comprehensive assessment of Maine's regulatory framework would take a minimum of four years, if not more, Cutler expects. The Department of Health and Human Services alone operates according to thousands of pages of regulations, which can't simply be pitched out the window in the name of reform, he says. Paul LePage's proposal for a $5 "E-ZPass" startup fee and expedited permit review process for new businesses oversimplifies the process, Cutler explains, saying, "You can't solve these problems with slogans." That's not to say Cutler hasn't indulged in a catchphrase or two of his own, including dubbing the head of his proposed regulatory review office the "Grim Repealer."
He also shies away from another LePage move, citing specific industries as fertile grounds for economic opportunity. Good jobs provide potential for advancement, a wage high enough to support a worker's family and opportunity for the employee's children to stay in Maine, Cutler says. Claiming such jobs require an advanced degree or are found in certain sectors is a "fool's errand," he says, though he has reached out to the tourism industry in particular.
Also on Cutler's agenda is leveraging the state's purchasing power to lower electricity and health care costs. He has outlined a plan to create a public power authority that would negotiate for cheaper energy from Canada, partner with the state's private energy entrepreneurs and move the state away from its current position as an energy exporter. On health care, Cutler highlights wellness and preventive care as hallmarks of his plan to lower costs — citing successful programs adopted by Cianbro and Hussey — which is built on maximizing the state's position as buyer of more than a third of Maine's health care services, through MaineCare and coverage of public employees.
The state can also revamp its role as an investor, Cutler says, in addressing the looming nearly $4 billion unfunded liability in the state employee pension program. Rising stock prices allowed the state to reap increasingly greater values on those assets even as it cut back its investments. "It was like your credit card balance being paid off by some Uncle Sugar out there," he says. The only remedy is amending the state constitution to allow for a 25-year rolling amortization schedule, which would give Maine more time to pay off its obligation beyond the current 2028 deadline, he says. Cutler also proposes switching to a defined contribution plan, where benefits are based on how much an employee pays into the fund, or a hybrid model.
Jackie Farwell, Mainebiz senior writer, can be reached at firstname.lastname@example.org. For more on the candidates, go to mainebiz.biz and click on the Mainebiz Sunday link to watch their televised interviews.