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May 25, 2022

MEREDA conference outlines federal impact on Maine's growth

File photo / MDOT Nearly $2.5 billion is coming to Maine for infrastructure investments, including work on bridges.

With nearly $2.5 billion coming to Maine for infrastructure investments through the federal Infrastructure Investment and Jobs Act, the money is not just about the physical assets such as roads and bridges, but about investments in people, said Heather Johnson, commissioner of the Maine Department of Economic & Community Development. 

Johnson was one of two keynote speakers at MEREDA’s annual spring conference on Tuesday.  

The focus of the conference was “Bridges, Broadband, & Roads: What the Infrastructure Bill Means for Maine’s Real Estate Economy.”

The legislation, passed into law last November, speaks to the need for a widespread investment in the U.S. and addresses the need to rebuild roads, bridges, water/wastewater, critical housing and support and expand overall connectivity – from transportation to broadband access, said Johnson. 

The roughly $1.2 trillion bill contains an estimated $550 billion in new spending above baseline levels. The spending touches every sector of infrastructure, from transportation and water to energy, broadband, and the resilience and rehabilitation of natural resources.

“There will be so many industries that will be touched by this,” said MEREDA’s president, Josh Fifield. “The scale of opportunity and effort that will be required is astonishing.”

Johnson said work is needed to sync the new money with investments made through the Gov. Janet Mills' $1.13 billion Maine Jobs & Recovery Plan, unveiled in 2021 as the discretionary portion of the $4.5 billion Maine received from the American Recovery Plan.

“There’s a lot to be worked through,” said Johnson. “It’s important to look at the funding streams” to think comprehensively about the issues both short-term and long-term. “How do we stack these funds together for efficient use of the dollars?”

Maine is in a better position to move forward after the pandemic than many thought would be the case, she said.

Since 2018, Maine has had the 10th-fastest rate of growth in gross domestic product in the U.S. In 2021, the GDP grew by 5.2% and reached pre-pandemic levels. Unemployment claims have dropped to pre-pandemic levels. Nearly all jobs have been recovered. And taxable sales increased 22.6% last year.

“The numbers are pretty good but I think people are concerned about what’s coming,” she said.

Maine businesses have been resilient and adaptive, she noted.

“So our economy did recover, and recovered quickly,” she said.

Maine is also seeing considerable in-migration. That compares with concerns of just a few years ago over out-migration, particularly of youth.

“There’s been a real shift,” said Johnson. Over the past two years, “People saw something in Maine that they liked.”

The state is optimistic that people will want to stay as they take advantage of remote work and grow their professional networks, she said.

But challenges to the state’s economy include global inflation, energy costs and labor shortages, she noted.

In thinking about overcoming challenges for long-term growth, a variety of programs are needed, said Johnson. Roads and bridges come to mind when thinking about infrastructure, but the concept also includes programs such as expanded broadband access, workforce training and affordable housing for low- to middle-income residents.

The state also needs to expand its energy-efficiency program to reduce costs long-term. To remove workforce barriers, more high-quality child care facilities are needed, she said.

Johnson warned that, although some of the new funding is formulaic, some will require competition with other states.

“We can work together to diversify and strengthen our economy,” said Johnson. “We have a pretty effective plan to target short-term issues and long-term challenges that will create stability and position us for the future.”

Maine Department of Transportation Director of Planning Dale Doughty, the event’s second keynote speaker, said his agency is tackling a “family of plans” that includes a long-range transportation plan, state rail plan, a plan for “human-powered” transportation such as walking and biking, a strategic transit plan related to factors such as housing and energy, and phase 2 of a  statewide aviation system plan.

Maine’s transportation system includes:

• 8,800 miles of state-jurisdiction highways, in addition to local roads, carrying over 15.1 billion vehicle-miles-traveled in 2019

• Over 2,700 state-owned bridges and minor spans; over 3,800 bridges and minor spans statewide 

• Transit operators with bus and ferry services provided over 7 million rides in 2019

• Downeaster passenger rail service provided over 500,000 rides in 2019

• 492 miles of state-owned rail and 1,390 miles of privately-owned rail

• 29 general aviation airports and 6 commercial airports

• 3 deep-water seaports 

• Over 500 miles of trails 

Highlights of the agency’s draft vision and goals are divided by mode of transportation. That includes:

• A transit system that utilizes innovations and technologies to improve service and reduce environmental impacts, expands mobility options, and improves quality of life for customers and communities 

• A highway and bridge network where roads have a purpose and identity with standardization of features that match customer expectations 

• A freight rail system that enables Maine businesses to reach current and future markets and sources with timely and reliable services

• A passenger rail system that provides safe, fast and reliable intercity and commuter rail passenger services 

• An active transportation system that is accessible to all Mainers and visitors and supports and improves people’s ability to access jobs, education, businesses, healthcare, and other destinations

• Airports that enhance the quality of life; provide critical services; and support local, regional, and statewide economies 

• Ports and supply chain routes that will attract investment and good jobs, including emerging opportunities such as offshore wind power generation. 

The new federal law increases formula funds coming to Maine by 28%, which will help to offset 30-40% inflation for MDOT’s most recent three-year work plan, Doughty noted.

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