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April 12, 2024

Maine lakes add $14B per year to economy, new report says

person in kayak with hill in background File photo / Laurie Schreiber Recreational users add $500 million per year to lakes and ponds’ net economic value, a new report says.

Maine’s 6,000 lakes and ponds have a big economic impact for the state, thanks largely to the value of lakefront properties and recreational users. 

A new study led by a team from the University of Maine at Orono, Maine Lakes and the Maine Department of Environmental Protection estimated the total net value of Maine's lakes and ponds to be $14.2 billion per year, with an additional $5 billion generated in direct and indirect expenditures and sales each year.  

"Our lakes are not only a source of natural beauty and recreation but also a vital economic engine for Maine,” said Adam Daigneault, associate professor in forest policy and economics at UMaine and a lead researcher of the study.

“Investing in their maintenance and improvement is not just beneficial for the environment but it can also provide a range of economic benefits to the state and the hundreds of thousands of Mainers and visitors who visit our lakes every year."

The study, "Valuing the Economic Benefits of Maine’s Great Ponds in the 21st Century," used a variety of methodologies to assess the value and expenditures related to lake-based recreation, properties, summer camps and water consumption across the state. 

Lakefront properties contributed $13.3 billion to net economic value of $14.2 billion, followed by recreational trips at $500 million.

Maine’s lakes generate more than $3 billion per year in direct and indirect expenditures related to recreation travel, summer camp tuition payments, water consumption, lakefront home maintenance and taxes, and more, the study says.

Users include Maine’s 145 summer camps, which serve 60,000 campers from in and out of state each summer. The 75% of the camps that are located on lakes are estimated to generate a value of at least $170 million per year through fees and travel costs that families pay, plus economic activity from operational costs such as supplies, salaries and meals. 

The study found that increasing challenges for Maine’s lakes include development, invasive species and climate change. Higher water temperatures, longer growing seasons and more runoff into lakes have created better conditions for algae, invasive species and harmful bacteria to spread. Rapid rates of population growth since the pandemic have increased development pressure throughout the state. 

Water quality

A survey of 768 Mainers indicated that 77% visit Maine lakes, with lake visitors averaging  nearly 16 trips per year. On average, respondents ranked lake water quality 8 out of 10, which means it’s safe for swimming, but not drinking.

Recreational users reported good water quality and safety from bacterial contamination as the most important considerations when choosing a lake. A moderate decline in water quality is predicted to reduce total recreation use value by 6% or $33 million per year. 

The research highlights the importance of water quality to recreational visits, estimating a potential $33 million annual loss in recreational use value from moderate declines in water quality. For towns like Belgrade that generate the majority of their tax revenue from shorefront properties, a decline in water quality could result in major losses in that revenue, the study founds.

Maine’s high lake clarity adds $13 billion in value to lakefront homes. The study estimated that a 1-foot increase in water clarity can result in a 1.1% increase in property values, emphasizing the significant impact of lake water quality on economic worth.

The study also considers water consumption: $126 million in public drinking water is sourced from Maine lakes each year and supplies half of the state’s population. Maine lakes hold 20% of all federal filtration waivers in the country, meaning that the water quality is high enough to drink safely without filtration. 

But degradation of surface water sources can be costly for towns and taxpayers. Last summer, declining water quality in Lake Auburn put the city of Auburn at risk of losing its waiver and of having to construct a $35 million filtration plant instead, according to the study.

“We know that policy-makers need the data this study provides to help guide and justify sound policies that protect the natural resources our economy needs to grow and thrive, especially the quality of our lakes and ponds,” said Susan Gallo, executive director of Maine Lakes and collaborator on the study. 

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