2005 November 25
by Marie Jones Holmes
The long awaited report on an economic development strategy for Washington County prepared by David Flanagan, Governor John Baldacci's special representative to Washington County, was released November 17. The 69-page report provides material for serious thought, both discouraging and encouraging. The 12 sections of the report deal with tourism, tribal nations, second-home development, energy, natural resources, defense and homeland security, manufacturing, infrastructure, education, financial incentives, government organization and a synopsis of recommendations.
In the introduction, Flanagan points out, "Regardless of whether Washington County is dead last, next to last, or third from the bottom in real economic terms, the harsh reality is that while much of Maine is on the upswing, the Downeast region, with its already precariously narrow economic base, has continued to slide." The report shows that in just the past four years, Washington County has, among other concerns: lost nearly 400 people, about one-fourth of those were people moving out of Washington County; seen the drastic curtailment of the once promising aquaculture business; and even experienced a drop in the ecotourism sector.
The report notes that the Washington County economy remains vulnerable to further significant job loses. The largest private employer, Domtar, is currently successfully exporting to Asian pulp markets. The mill is old, relatively small and marginally profitable at best. Its chances of survival will be improved by careful and supportive attention from the state. Other further significant job losses may result from the aquaculture industry now dominated by one Canadian firm. Blueberries are increasingly being harvested with mechanical equipment, which may benefit competitiveness, but also limits employment. Tourism appears flat, and in some sectors, such as guiding in the Grand Lake Stream region, even declining. Another ominous new development threatens the county economy. That is the recent doubling of energy prices, which will reduce disposable income for residents as they pay higher heating bills, and make the region even more remote and expensive for tourists and commerce to access.
Recently, the Longwoods International tourism study found that the most popular experiences by visitors on Maine trips were visiting a small town, the beach or the ocean; eating a lobster and unique local foods; visiting wilderness areas, lakes and rivers; and shopping for gifts and souvenirs. Trips taken to Maine are much more likely to be outdoors oriented (26%) than the national average (7%). The Longwoods study also found that while the Downeast/Acadia area received 23% of all tourists in Maine, only 5% visited Calais.
The report also states there is the potential for economic activity from second-home development. And the skyrocketing prices for coastal land are testimony to the values buyers are now willing to attribute to this remote county.
Flanagan says the state could encourage more retirees to make Maine their home. One way to accomplish this would be to eliminate the state income tax on retirement income for people who reside in Washington County. Other states have adopted a conscious policy of attracting retirees as an economic development tool. If this experiment worked in Washington County, perhaps it could be applied more broadly later.
As part of their overall mission of serving as a catalyst for economic development in the region, the University of Maine at Machias and the Washington County Community College should develop programs of interest to retirees, the report states. Two recent nation-wide publications noted that many of the most attractive communities to retirees were college towns, including Brunswick.
Under the energy needs section, liquefied natural gas (LNG) in Maine is discussed. Natural gas imported directly into Maine would have one less cost component than gas shipped through New Brunswick because it would avoid the $0.50 per mmbtu transmission costs imposed by Canadian pipelines. On the other hand, Maritimes & Northeast Pipeline may charge a higher transportation cost to use its pipeline for latecomers than its first new customers. In any event, the report notes Maine's LNG policy ought to take into account the following factors: National policy urgently favors increasing the capacity of the United States to import LNG; Maine is heavily dependent on natural gas to produce electricity; Maine enjoys the combination of sparsely populated areas with deep harbors and proximity to a pipeline, which is quite rare along the Atlantic Coast. "In other words, this is one business where Washington County has a genuine competitive advantage," comments Flanagan.
He believes this investment, in itself, would be an extraordinary boost to the regional economy. But it would also open up the possibility of the development of as much as 500 MW of cogeneration at the Domtar plant, giving that facility a new lease on life. The report states that energy issues are front and center in Washington County. The tie-line and the pumping station could all have an enormously positive impact on the economy and energy security for Washington County and the nation. Opportunities also exist for LNG and for the further development of renewable power. Other energy projects discussed include biomass plants, wind power and tidal power.
Marine resources represent only a modest slice of the Maine economy. The total value of the fishing industry to the state is just under a billion dollars. In Washington County, however, the jobs associated with fisheries and aquaculture loom larger in significance both financially and culturally.
Lobstering continues to do well. Thus, while the state should remain focused on research and watchful as to the future of lobstering, attention should be devoted to the development of alternatives.
The report notes that a decade ago aquaculture held exciting prospects for Maine. Farmed salmon rose to a high of 36 million pounds by 2000, and the aquaculture business employed approximately 2,500 for the raising, processing and distribution of Atlantic salmon. But in the last five years, the dream of a new base industry for Washington County collapsed, and the major salmon aquaculture firm operating in the state was anxious to sell out and leave. Flanagan says, "In my judgment, it would be far preferable for the specialist agency, Department of Marine Resources (DMR), to make the case for aquaculture, and to promote the Maine product, than a generalist agency like Department of Economic Community Development, and I therefore recommend that this capacity be restored to DMR."
The report also deals with scallops, mussels, clams, urchins and other bottom dwellers.
Under infrastructure the report recommends the support of any application to the Federal Aviation Administration for the approval and funding for the construction of a full service, general aviation airport in the region. The report advises to make loans from the Maine Public Utility Commission's universal service fund available for extending wireless and broadband service to rural areas. There is a need for road improvements on Route 193, connecting Routes 9 and 1A. There is also a need to maintain existing public transportation services.
The report in full detail can be viewed on the Sunrise County Economic Council's website, <www.sunrisecounty.org>.