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Evaluations of Maine Economic Development Programs Completed
AUGUSTA – An independent analysis of state investments in economic development and research and development was completed recently in accordance with Maine statute. The reports were compiled by Investment Consulting Associates (ICA) following the company’s contract award by the Maine Department of Economic & Community Development this past June.
The biennial progress reports provide an assessment of the effectiveness of Maine’s economic development programs and an analysis of the success of the state’s investments in research and development. The reports were generated after ICA developed and deployed a wide-ranging survey of recipients of Maine economic development programs and through in-person interviews with businesses and stakeholders. They also collected reports, data, and other information from stakeholders and state agencies when available. It includes recommendations to improve the evaluation process going forward, as well as valuable insights into which programs provide a good return on investment based on ICA’s cost-benefit analysis.
“We are pleased to receive the analysis of Maine’s economic development programs and appreciate the depth and complexity of the recommendations,” said Commissioner George Gervais of the Maine Department of Economic & Community Development. “ It is definitely challenging for a third party entity to generate meaningful assessments given the difficulty of obtaining relevant data and information from state agencies and the private sector. The reports include recommendations that address the difficulty of data gathering and offer proposed solutions.”
ICA worked with a Steering Committee of individuals from the private and public sectors in Maine as it developed its methodologies and collected its data. The Steering Committee participated in regular bi-weekly conference calls with the consultant team throughout the process. The committee included State Senators Emily Cain and Andre Cushing, Peter DelGreco of Maine & Company, George Gervais and Brian Whitney of the Maine Department of Economic & Community Development, Steve Levesque from the Midcoast Regional Redevelopment Authority, Bob Martin from the Maine Technology Institute, Jake Ward from the University of Maine, and Luann Ballesteros from Jackson Laboratory.
Among its findings in the two reports, ICA’s cost-benefit analysis demonstrated that the Business Equipment Tax Reimbursement (BETR) program is a worthy investment of state funds, that the Pine Tree Development Zone (PTDZ) program demonstrates the importance of competitive tax policy for new and growing companies leading to the creation and/or retention of nearly 10,000 jobs that could have landed in other states, and the Maine Technology Institute’s Development Fund Loan program and the Finance Authority of Maine’s Commercial Loan Insurance and Economic Recovery Loan programs generate a consistently high rate of return on investment.
“Over the past 6 months, our team invited 1,500 Maine business to participate in a detailed survey, reviewed 60 different incentive programs, interviewed elected officials, administrators, and other public sector individuals to better understand the numerous incentive programs, and conducted 53 interviews across 35 different companies and organizations that included various stakeholders, policy makers, and companies within the State of Maine,” said ICA President Chris Steele. “These exchanges provided the foundation for our evaluations and informed our analysis and recommendations.”
In accordance with its contract, ICA is also responsible for completing a one-time overall evaluation of the state’s investments based on the results of its recently submitted assessments. That report, due no later than June 30, 2014, will assess how effective the state’s economic development strategies have been in stimulating and sustaining consistent, competitive growth in Maine’s economy compared to other states nationally. Specifically, it will gauge which states have experienced the greatest growth in the last 5 years, determine the drivers of that growth, discover the economic programs that contributed to the growth, and evaluate how Maine compares. It will also ascertain whether or not the state is missing opportunities to provide incentives to some business sectors while potentially over-subsidizing others.
The Comprehensive Evaluation of State Investments in Economic Development and the Comprehensive Evaluation of Investments in Research & Development will be presented today to the Governor and the Legislature. Commissioner Gervais and ICA President Chris Steele plan to work with legislative leadership to schedule an opportunity to make a formal presentation to the relevant legislative oversight committees to present the findings and answer any questions that may arise.