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Maine is teetering on an economic cliff, and it's urgent that the state take action as soon as possible, a preliminary report from the Economic Recovery Committee said.
Three immediate issues to address are education support, a $300 million immediate direct economic relief program and broadband investment, committee chairs Josh Broder and Laurie Lachance said in a letter to Gov. Janet Mills accompanying the report.
The committee was established by Mills in early May, with Broder, CEO of Tilson, and Lachance, president of Thomas College, as chairs. It must submit "quick start" recommendations to help Maine's economy by July 15, and long-term recommendations by Dec. 1. The prelimary report, published today, was in anticipation of a more detailed July 15 report.
The end this week of the federal Payroll Protection Program and other economic support, "Represents an economic cliff for our state, and nation, for which there is no modern precedent or forecast," Lachance and Broder said. "Unless further stimulus emerges at the federal level the effect on our state’s people and businesses will be devastating."
They said that the $1.25 billion the state has been awarded under the federal CARES Act is not enough to save Maine's economy, which means tough decisions for the state..
The letter comes as the state prepares for Fourth of July weekend, normally the official kickoff to the state's summer season. As restaurants can only allow limited capacity, bars can't offer indoor service, there are no gatherings of more than 50 people and lodging establishments are restricted, a variety of sectors have said that many businesses won't recover from the impact.
The committee also offered more than a dozen "quick start" suggestions. To read the full letter and see details of the suggestions, visit the Governor's Economic Recovery Committee webpage.
The committee, made up of 47 business and government leaders from around the state, has held seven full meetings and more than 50 subcommittee meetings
"Amidst all this work, one sobering truth has become clear: COVID-19’s impact on Maine’s economy is severe and ongoing," the letter said. "It also falls on some groups disproportionately. Many Maine workers, particularly in service industries and in communities of color, who were struggling with inequity prior to COVID-19 are now at even greater risk. They should be a foremost consideration for public support.
"All of this means that time is of the essence in this unprecedented crisis," Broder and Lachance said. "It is urgent that the state of Maine implement vital, equitable measures to support the health, safety and economic security of Maine people and businesses, as soon as possible."
The three major recommedations are:
This has the most urgent timeline, and is a "matter of survival" for child care, agriculture, tourism, hospitality, fisheries and forest products, among many others, the report said.
The committee recommends a $300 million economic relief grant program through the Maine Department of Economic & Community Development and Finance Authority of Maine, similar to one in New Hampshire. The program would start this month and distribute most of the money by Aug. 31. It would be administered largely through Maine’s banks, credit unions and community development financial institutions.
"The impact is felt by seasonal small businesses for which traditional financing is challenging, and larger established businesses with decreased revenues due to declines in consumer spending or declining global markets," it said. "Many are businesses otherwise sustainable when the pandemic subsides – if they can make it that long."
Additional debt support is not the right solution, which could have a negative impact on an organization’s existing bank covenants and reduce access to credit from financial institutions when they need it most, the report said.
Education is a pre-condition to economic stability and the safe resumption of in-person instruction in Maine’s pre-kindergarten through grade 12 schools "is foundational for the safety and well-being of all children in Maine," according to the report.
It's also essential to allow people to get back to work. "This is further magnified by feedback to the committee from communities that reveal inequities in the system are harming too many young students working in remote learning settings."
The committee recommends prioritizing save opening by allocating between $40.5 million and the $328 million suggesed by the state Department of Eductation to allow Maine's 180,000 students to go back to school; strengthening support for childcare providers; and supporting safe reopening for higher education by providing clear guidelines.
The state's $600 million broadband investment deficit has had a big impact on Mainers' ability to adapt to the pandemic, limiting their access to distance education, telemedicine and remote work, the committee said.
Broadband investment was a cross-cutting issue across all subcommittees.
The committee recommends:
Not part of the three recommendations, but noted by the committee, is the affect the pandemic has had on debt and equity markets, which have "seized up, effectively stopping large projects and significant capital investment in Maine’s most innovative and productive sectors."
There is support among the committee's subcommittees for significant funding to the Maine Technology Institute to support and enhance the Maine Technology Access Fund. The committee said it expects to have a a recommendation in the July 15 report.
The preliminary report includes quick start recommendations from subcommittees, including one that the report acknowledges doesn't come under the committee's authority — adjusting the state's quarantine for out-of-state visitors.
"To honor the hard work of our Hospitality, Tourism and Retail Subcommittee, we pass along its call for regional quarantine parity even as we acknowledge this topic is not in our charge and belongs in the realm of public health experts," the report said.
It said the majority of committee members supported the recommendation, but it also got the highest number of strongly unfavorable responses.
"Even as we submit this report, conditions in the pandemic nationally as a whole have degraded significantly leading many states to slow reopening and implement more stringent controls," the report said.
Recommendations from the five subcommittees are:
The committee said that the PPP and other programs "which have delivered billions of dollars to Maine workers and businesses, helped carry them through the historic economic shutdown to preserve public health."
It urged the administration to quickly deploy the remainder of the $1.25 billion in federal money it's received, to help the largest number of Maine people. It also acknowledged that money won't be enough, which is what spurred the top three recommendations.
"Based on what our committee has learned over the past weeks it is a mere fraction of what’s required for our economy," the report said. "There is no avoiding that difficult choices lie ahead."
Of that money, $270 million is committed to stabilizing the state’s unemployment trust fund. "We endorse this action," Broder and Lachance said. "Had it not already been taken, we would have made it one of our urgent recommendations."
The report said that all the recommendations recognize that COVID-19 public health, education and prevention efforts are the underpinnings of any economic recovery.
"To that end, we call for continued support measures for businesses, organizations and people to procure personal protective equipment to protect their employees, customers and themselves, which has been a significant, unplanned burden."
Visitors from Connecticut, New York and New Jersey won't have to quarantine for 14 days or provide proof of a negative COVID-19 test, Gov. Janet Mills announced Wednesday. They join those from Vermont and New Hampshire, who are already exempt.
The decision is based on public health data that shows the prevalence of the COVID-19 virus and the positivity rates in those states are declining, and is based on a 10-day downward trend.
Mills still urged visitors from the three states get a test before visiting Maine. Testing site information is available at get-tested-dovid19.org.
With more people coming to the state, she also issued an executive order requiring face coverings in large retail stores, lodging establishments, restaurants and outdoor bars and tasting rooms in Hancock, Waldo, Knox, Lincoln, Sagadahoc, Cumberland, and York countes, as well as in Auburn, Augusta, Bangor, Brewer and Lewiston.
She pointed out that in the last week, states including North Carolina, Nevada, Washington and Oregon have implemented similar measures in order to reduce transmission of the virus.
“Today I am encouraged as we take another step in reopening our economy and supporting the tourism industry. The decision to add three Northeastern states to the exempt status is welcome news to the Maine Tourism Association and others in the hospitality sector,” said Tony Cameron, CEO of Maine Tourism Association, in a news release from Mills' office. “The industry is committed to following all health protocols set forth in the Keep Maine Healthy plan.”
Rick Martin, director of operations for Olympia Hotel Management, said in the release, “The health of our guests and neighbors is a priority, and I’m confident Maine’s tourism industry will ensure safe and healthy experiences throughout the state.”
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Learn moreThe Giving Guide helps nonprofits have the opportunity to showcase and differentiate their organizations so that businesses better understand how they can contribute to a nonprofit’s mission and work.
Work for ME is a workforce development tool to help Maine’s employers target Maine’s emerging workforce. Work for ME highlights each industry, its impact on Maine’s economy, the jobs available to entry-level workers, the training and education needed to get a career started.
Whether you’re a developer, financer, architect, or industry enthusiast, Groundbreaking Maine is crafted to be your go-to source for valuable insights in Maine’s real estate and construction community.
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