Please do not leave this page until complete. This can take a few moments.
Maine doesn't have the $1.1 billion it will take to help shore up the pandemic-shredded state economy, so the priority has to be public health, said Josh Broder, a co-chair of the governor's Economic Recovery Committee.
The committee, created in May and made up of 45 members from across sectors, issued its economic support and stabilization recommendations Wednesday. The group is also charged with finding long-term solutions to get the state's economy back on track, with a report due Dec. 1. The groip is chaired by Broder, CEO of Tilson, and Laurie Lachance, president of Thomas College.
Wednesday's report calls for $1.1 billion to shore up the economy, split between supporting Maine people, which includes education and housing; stabilizing businesses, which includes employer grants, workforce development and innovation capital; and building out the broadband infrastructure.
"We recognize that there is more demand than there are resources," Broder told Mainebiz this morning. "The most urgent ones, from our perspective, are the ones that address our ability to operate safely."
The recommendations are to a starting point for those who must implement them — the Maine Legislature and Gov. Janet Mills.
"It's a guide to making some choices on what gets funded now, what gets funded later and what may not get funded at all," Broder said.
The report stresses the economic damage the pandemic has caused in Maine — "it has pushed many otherwise healthy Maine businesses to the brink."
But it also recognizes the impact on individuals, highlighting the inequities of both the health aspect of the pandemic and its economic fallout for those of color and low-income. "A stable Maine economy means supporting Maine people. Many workers and families, especially those who struggled with inequity prior to COVID-19, now face immense challenges."
The recommendations break down to the following.
A year-over-year comparison of Maine sales tax data from April demonstrates 80% revenue decreases in lodging, 58% in restaurants and 45% in retail, according to the report.
"Few of Maine’s small businesses were equipped to handle this economic shock," it says, adding that federal stimulus programs are not enough to secure economic viability as the effects of the pandemic continue.
The nonprofit sector employs one in six Maine workers (98,000). "Many of these organizations are at the forefront of the COVID-19 crisis, providing essential services to Maine citizens and residents," the report says. "Right now, cities and states are relying on nonprofit partners as a buffer against the worst impacts of the outbreak, at a time when their viability is at stake."
The report also says that "the forcible adaptation to operating in a COVID-19 world" means many employers in otherwise viable industries and organizations need immediate assistance. "Quickly and efficiently administering aid will be crucial to Maine’s recovery."
The committee found that COVID-19 is making inequality in Maine, already an issue, much worse. Maine has the greatest disparity of COVID-19 infections for Black people in the country — they represent 33% of the positive cases in which race is known, but are only 5.7% of the state's population.
"The economic impact is just as disproportionate," the report says. Mainers who are Black or of mixed races, young people, women, and households with children all were more likely to have felt a financial impact from pandemic disruption.
"The committee heard, and agrees, that a recovery plan that fails to address these inequities will only serve to weaken our long-term recovery," the report says.
"Child care is a critical economic component, especially for working parents, and programs run on razor-thin margins," it says. About half of Maine child care programs closed in April, while those that remained open operated with fewer children, and therefore less income. Providers must procure PPE and change practices to control potential infection.
"Child care programs are struggling to meet the demands of working families, offset revenue losses from decreased enrollment, and absorb increased costs to protect the health of children and staff," the report says. "Financial assistance for child care programs will ensure the state has child care available for working parents."
Infrastructure investment is needed for economic support and stabilization, laying a foundation for future sustainability and growth, the report says. "These investments will also improve the efficiency of Maine’s economy and be targeted to provide equitable access to important resources for all Mainers."
The importance of broadband internet access has been highlighted by the pandemic, as Mainers adapt to remote working, education, medical services and more. The pandemic also underscored the deficits that limit access to broadband in Maine. ConnectME, the state's broadband authority, estimates it will cost $600 million to deliver broadband service to 95% of Maine.
Broadband issues were a topic across several of the sector subcommittees. "It is crucial that Maine make broadband and other technology and training investments to support partial remote education, telehealth, and remote work for flexibility to adapt for a rapidly changing pandemic," the report says.
Immediate investment will also help Maine capitalize on its attractiveness as a remote work destination and put Maine in a better position to get federal matching money, the report said.
Transportation investment is also needed to provide jobs and economic stimulus in the short-term and provide opportunities for long-term growth, the report says. The state Department of Transportation faces steep revenue declines over the next 18 months as a result of decreased receipts from fuel taxes and motor vehicle fees.
"Given historically low rates for borrowing, and the economic benefit of continuing infrastructure proj-ects, the committee supports further bonding for infrastructure that could be approved as soon as November," it says.
Broder said today that while the bond issue is more a piece of the long-term recovery, if it's to be on the Nov. 3 ballot, the Legislature has to take it up this summer.
The recommendations are:
The committee will meet at the end of the month to look at specifics that weren't addressed in Wednesday's report, Broder said. The report was based on urgency "and we didn't spend a lot of time making structural recommendations to support specific sectors."
Some of those, which were also in the committee's "quick start" recommendations earlier this month, will be addressed before the committee makes the pivot to the long-term focus of its work beginning Aug. 14.
The committee was charged by Mills with using the state's 10-year economic plan, which was unveiled in December, as an outline for the recovery, which Broder said represented some really good work by the state.
"How do we go from this terrible low that no one expected to getting back on track?" he said. Making the task more difficult is the fact the pandemic is still evolving, and though, health-wise, Maine has fared better than most of the country, that could change. Just as importantly, the state is part of a national economy, so the effect of the pandemic on other states has an impact on Maine.
"The biggest challenge is that the pandemic is still raging," Broder said.
He said, though, that a huge positive is that the 45 members of the committee, who were from across sectors, regions and political affiliation, were able to come to a consensus on the Wednesday report.
He gives a lot of the credit to Mills for putting together a solid team.
"While individuals may not feel exactly the same, we as a committee got it right," he said. "I was really impressed with the level of consensus."
He said the long-term issues will be more challenging, but, "I think we'll try to build on that strong level of consensus."