Two ‘NOs’ and a ‘YES.’ The MBTA urges you to get out the vote for three important ballot questions.
By Thomas H. Martin, Jr.
Troubling questions. Two voter referendums could reduce transportation funding in Maine.
By Douglas Rooks
The $71.25 million transportation bond. Voters will weigh in on a bond to fund a range of important transportation projects.
Questions of transportation. Rep. William P. Browne (R-Vassalboro) talks about the MaineDOT paving cuts, the federal stimulus and more.
By Maria Fuentes
Silver bullet eludes Transportation Committee. Legislators come up empty after two summer sessions on fixing the funding gap.
Right brain, left brain. Jay and Heidi Shorette combine talents for new challenges at Dirigo Slipform. By Kathryn Buxton
Fresh outlook. RC & Sons Paving sets up a new shop in Augusta.
By Kathryn Buxton
Transportation by the numbers. A statistical look at MaineDOT.
By Bruce Van Note
2 ‘Nos’ and a ‘Yes’
The MBTA urges you to help get out the vote on November 3
by Thomas H. Martin, Jr., MBTA President
There are seven questions on the November 3 ballot, and I wanted to bring your attention to three that are of great importance to the transportation industry. All three questions – two if they are defeated and one if it is passed – will give our industry a big boost at a time when we need it most. So, we need your help getting the vote out.
Below is a quick summary of the issues and how they stand to affect our businesses and quality of life. You can read more about them in this issue of Maine Trails. Also, Maria Fuentes and the MBTA staff will be providing members with more information, including voter fact sheets and e-mail alerts that I hope you will share with family, friends and co-workers. Please watch your e-mail, fax and mbtaonline.org for more information.
YES on Question 6, the transportation bond
This November, Maine will be voting on a $71.25 million transportation bond referendum that will be the backbone of MaineDOT’s biennial budget. From my perspective as a former public works director and current business owner, I know passage of this bond is of paramount importance to our communities and to our state.
This includes funding for transportation improvements that will make life better for all of us. The bond will leverage $148 million additional in federal, local and other funding matches – making the total value to our state more than $219 million in investments to highways and bridges, airports, public transit facilities and ferry and port facilities.
Second, we cannot afford to neglect our transportation infrastructure any more. During the past several months, we have been hit hard by budget cuts at the state – that includes the elimination of 75 percent of the Maintenance Surface Treatment program for this biennium. If this bond measure does not pass, it will decimate much of what remains of MaineDOT’s two-year work plan. And that would have disastrous effects in terms of continuing the downward spiral of the state’s transportation capital program, impacting the safety of our transportation network, as well as our businesses.
I hope you will join me and the MBTA board in supporting this bond. You can read more specifics about the bond referendum in “The $71.25 million transportation bond”, page 22 of this magazine.
NO on Question 2, the excise tax referendum
While the excise tax – Question 2 – does not go exclusively to roads, for most towns it is a big part of the budget they devote to the maintenance of municipal road systems. The 55 percent cut called for in the initiative would trigger an annual revenue loss estimated at $84 million. Most Maine towns and cities already are struggling to keep up with road maintenance – and if this question passes, there are certain to be more potholes, rougher roads and less plowing.
Reducing the excise tax will potentially make our roads less safe, and I hope you will join me in voting NO on Question 2.
You can read Doug Rooks’ article on both the excise tax and Tabor II initiatives and their potential effect on Maine’s transportation network in this issue’s cover story “Troubling questions” on page 14.
NO on Question 4, TABOR II referendum
The most frustrating aspect of Question 4 on the ballot is that it ignores Maine’s referendum process. We voted as a state on this issue three years ago – and as a state, we soundly opposed it. Now, countless hours and millions more dollars are being wasted on this issue.
The fact is this “taxpayers’ bill of rights” imposes unrealistic limits to state and local government spending and is no better an idea now than it was three years ago. If it is passed, it could bring state government to a grinding standstill by tying the hands of our elected officials and putting costly requirements on state and local governments to put revenue increases out for public vote. We don’t need any more red tape in our transportation policy. Colorado tried TABOR, and then rescinded most of it because their infrastructure, along with education, deterioriated.
In closing, I would like to let you know that the MBTA board of directors has decided to cancel the MBTA Transportation Achievement Awards for 2009, a casualty of the struggling economy that has hit MBTA members particularly hard.
With so many of our members dealing with layoffs and other cost-cutting measures, we couldn’t in good conscience ask members to undertake the considerable cost of staging the awards and the gala dinner.
It has been good to see so many of you at our meetings and events this summer and fall – the Infrastructure Fund Golf Classic, the Aroostook County Meeting and the MBTA Fall Convention. We very much appreciate your support during these difficult times; we hope it reflects your belief in our advocacy work increasing public awareness of the need to invest in our transportation network. We have several more important events coming up, including the Maine Transportation Conference and our Holiday Meeting in December.
These are challenging times for our industry, but by getting together and sharing our ideas, we will emerge stronger and better able to support the MBTA’s mission of creating safer, more efficient transportation for Maine. Thanks, and I look forward to seeing you soon!
Don’t forget to vote!
Two voter referendums on the November ballot could have long-lasting implications for Maine’s transportation network
By Douglas Rooks
Transportation funding on the ballot
Two upcoming voter referendums, if passed, would have a devastating effect on the safety of Maine’s transportation network. Questions 2 and 4 are two of seven that will appear on the November 3 statewide ballot – including four initiatives and a citizens’ veto, a constitutional resolution and the transportation bond question.
The MBTA opposes these two referendums and has joined a coalition of individuals and organizations across the state in fighting to defeat them.
The questions read as follows:
“Do you want to cut the rate of the municipal excise tax by an average of 55% on motor vehicles less than six years old and exempt hybrid and other alternative-energy and highly fuel-efficient motor vehicles from sales tax and three years of excise tax?”
“Do you want to change the existing formulas that limit state and local government spending and require voter approval by referendum for spending over those limits and for increases in state taxes?”
FMI about the campaign to defeat these two questions, visit VoteNoOnTabor.org and NoBadRoads.org
Two seemingly unrelated referendums that will appear on the Nov. 3 ballot could have serious effects on transportation funding.
What the voters will make of the two tax-payer initiatives is anyone’s guess. With at least seven referendum questions on the ballot –including the four initiatives and a peoples’ veto – it may be more difficult to focus voter attention on the likely consequences of the tax-payer initiatives. Still, there is little doubt that the financial effects of the two questions on transportation, combined, could be very substantial.
Question 2 is generally known as the excise tax referendum. It would cut, by at least 40 percent, the municipal revenues usually spent on roads and bridges. According to an analysis by the Maine Municipal Association (MMA), that would reduce revenues by approximately $84 million. In some communities, vehicle excise taxes amount to more than 10 percent of revenue from local sources, exclusive of state aid. While not dedicated to roadwork, as a matter of state law, excise tax is closely correlated with municipal highway budgets, and most towns and cities spend more annually for summer paving and winter plowing than they receive from this source.
A feature of the proposed excise tax question that target cuts entirely to owners of newer vehicles is also attracting attention. By the third year, rates will have been reduced to the current sixth-year level of $4 per thousand. At least two-thirds of vehicles now on the road are six years or older.
In an editorial when the proposal was submitted to the legislature, the Bangor Daily News observed, “A perverse consequence of this bill, based on Mainers’ propensity to keep their cars longer, is that it makes the excise tax more regressive.”
Question 4, dubbed “TABOR II” (Taxpayer Bill Of Rights), is a redrafted version of a referendum the voters rejected in 2006. Unlike the defeated referendum, the question that goes before voters this fall has broader ramifications. TABOR II would change the formulas limiting state, county and municipal increases that have been Maine law for four years. It also would mandate a referendum vote for any budget increases above these new limits. On the state level, a referendum vote would be required for tax increases above a certain limit as well.
If passed, this referendum would apply to the annual increases in the fuel taxes that support the Highway Fund, that this year amounted to just 1 cent a gallon from the indexing provision. It would also affect future legislative actions like the 2008 increase in vehicle registration, license and title fees by $10 each, funds that were designated for the state’s bridge reconstruction program through the TransCap program championed by the MBTA.
At a time when the state is struggling to maintain its reconstruction and maintenance programs – Maine this spring canceled three-quarters of its planned maintenance surface treatment program for the current biennium – any diminished funding is viewed as serious.
Effects on towns and cities
Municipal officials are leading the campaign in opposition to the excise tax question. Geoff Herman, government relations director for MMA, recently told the Bangor Daily News that the effect of the referendum, if passed, would be to shift the burden to property taxpayers: “That money is going to come from somewhere, and if it doesn’t come from this particular source, it’s probably going to come right from the property tax itself, so that’s a concern.”
Other municipal officials see it somewhat differently. Greg Dore, long-time road commissioner in Skowhegan and a former MBTA president, said resistance to property tax increases is high and the more likely result would be serious cuts in local road programs. Municipalities are already seeing reductions in revenue sharing and education funding from the state and in dedicated revenue from the Highway Fund as well.
Bruce Manzer of Bruce A. Manzer, Inc., an excavating and paving contractor with plants in Anson and Bethel, was even more blunt. “If these questions go through, we’ll be done.”
Manzer does business with towns in Maine’s northern counties and New Hampshire, as well as work for both states’ departments of transportation. He views the possible reductions as a serious threat to an already beleaguered system and said, “the state doesn’t have the money to bring the roads up to standard, and it’s just going to get worse.”
Municipalities may also find themselves jumping through additional hoops just to maintain their road programs, even if they choose to tap property tax revenues to replace lost excise tax revenues. Towns exceeding the newly restrictive TABOR limits will have to conduct referendums to do so, even if they have approved the budget through an open town meeting.
Dana Connors, president of the Maine State Chamber of Commerce, said the chamber’s board is still assessing possible positions on the two questions. While the chamber has members who have been generally supportive of the current TABOR plan, it is less likely to take an active role in the excise tax campaign.
And in testimony earlier at the legislature, when the Taxation Committee was conducting a hearing on TABOR, Connors called attention to the effect on transportation funding, and the adverse impact on roads and bridges the measure would have. Prior to his Chamber service, Connors was commissioner of transportation in the Brennan and McKernan administration, from 1986-94.
In a recent interview, Connors said that transportation funding should not be viewed as discretionary from the business perspective.
“It’s very fundamental to our entire economy, in moving people and goods safely. The truth is that, while we should explore alternatives, in a rural state like Maine, upwards of 80 percent of all goods move over the highway system.”
He said such a view “should not be confused with a lack of sympathy for taxpayers,” noting that Maine’s excise tax rate is often cited as the seventh highest in the country. “But every single one of us has a road in front of his home or business. This is just a high priority investment we can’t afford not to make.”
Even if indexing provisions were approved by voters under a TABOR system, Connors said that existing fuel tax rates are proving inadequate to fund even present levels of investment. “People are driving less, so revenues are down, and the popularity of fuel efficient vehicles will drive them down further,” he said.
Many voters may be unaware of just how many programs could be covered by the referendum provisions, according to an analysis prepared by the Senate President’s Office. Including the General Fund and Highway Fund, there are at least 300 special revenue accounts and 35 internal service accounts that could be affected.
And in contrast to the existing indexing system, that aims to maintain the value of Highway Fund revenues, TABOR would require any “excess” revenues that exceeded the state’s projections to be automatically used to lower the gasoline and diesel taxes.
Finally, TABOR could threaten bond ratings for state, county and local governments. In both California and Colorado, similar tax and spending limitations have led to credit downgrades for numerous jurisdictions. Colorado, the only state that currently uses TABOR, has suspended major components of it for five years.
Greg Dore said that many communities, including Skowhegan, have struggled to maintain their local road programs even with current revenues.
If the referendum passed, he said, “public works would take the biggest hit.” While, in theory, selectmen and councils could propose reducing other programs to make up the difference, “you can’t do it,” Dore said, since the link to the excise tax is so clear.
Skowhegan maintains about 100 miles of roads, and in a good year the town manages to repave seven miles, and reconstruct about one mile; Dore said about 30 percent of the town’s roads are in need of reconstruction. In recent years, though, the repaving mileage has fallen to about three a year. “At that rate it would take 30-40 years to repave everything,” he said – clearly not a sustainable level.
While the voters in Skowhegan have consistently recognized the need to fund the town’s program responsibly, Dore believes that may not continue should the referendum pass.
Dore meets occasionally with fellow public works directors from central Maine and hears similar stories to what Skowhegan’s facing.
“We’re all facing the same things. We’re all in the same boat,” said Dore.
Part of the problem, in his view, is tight budgets prompt towns to cut back in areas less immediately visible – like purchasing equipment for road maintenance. “Over 10 years, we can expect to buy about $1 million in machinery,” he said. “You may not spend it in that particular year, but it’s still a $100,000 cost.”
There are other questions about the referendums, if the voters approve them. One would be establishing an effective date of the excise tax reduction. If passed, the measure would take effect between mid-January and mid-February. The problem for towns and cities will be adjusting to a significant revenue decrease in the middle of the fiscal year.
Bangor City Manager Ed Barrett said implementing a reduction in the current budget year would leave no budget flexibility at all. With no other way to keep the budget balanced, municipalities would be faced with canceling work and laying off employees.
On TABOR, a much more complicated piece of legislation, there are many questions. One of great importance for future budgets concerns the base year – the current one – on which all future growth in permitted spending could occur.
Because state and federal revenues have been sapped by the current recession, TABOR could effectively lock tax rates at unusually low levels. TABOR would permit year-to-year increases no higher than general inflation plus population growth at each level of government. The LD 1 system of spending limits already in effect, by contrast, relies on a 10-year rolling average of economic growth as its basic yardstick.
In Auburn, Bob Belz, the public works director, has seen the cycles of boom and bust before. According to Belz, his city was one of a number of municipalities where there was sustained pressure to reduce property taxes from the late 1980s into the 1990s.
The city did reduce taxes, but a disproportionate share of the cuts came from the highway budget.
By the mid-1990s, new city councils in Auburn responded to numerous complaints about road conditions by putting more money into the budget, enabling public works crews to gradually reduce the backlog of needed repairs.
The problem, Belz said, is that “it’s a lot more expensive to fix the roads once they’ve deteriorated than it would have been to maintain them in the first place.” He worries that measures like the excise tax referendum, however well-intended, would put municipal road budgets back into the same fix.
Bruce Manzer says he sympathizes with those who feel that the excise tax is a burden, and believes gasoline and diesel taxes are a better way to raise money for roads. “If you just put a nickel on the gas tax, you’d produce a lot of money, and you’d spread the load more evenly,” he said.
Manzer said he believes the public is actually much more supportive of transportation funding than many believe. As for a potential tax increase, he said, “A year ago, the price of gas was $4.25 a gallon. You can’t believe that the price changes aren’t a lot more disruptive than whether the tax is a little lower or higher.”
That, in essence, was what the legislature considered doing in June when it debated going beyond the scheduled one-cent increase to a higher level, while repealing the indexing law as part of the package. But no bill ultimately passed muster, and it’s unlikely lawmakers will reconsider the issue before the November vote.
That’s why Greg Dore considers it so important for transportation officials and local governments to start making the case for preserving existing funding, at least until other changes can be considered.
“With people afraid of losing their jobs, it’s hard to maintain spending, because we do have high costs,” he said. “We’ve got a lot of work ahead of us to get the attention of the voters. They have to know what the consequences would be.”
Manzer said that when the public is asked directly whether it supports transportation spending, such as the biennial bond issues, it usually says yes. “When you ask them whether they’d like to ride on a good road or a bad road, they understand.” If the same connection to the referendum questions can be made, he believes voters will take the same position again.
“We’re already paying the price,” he said, in the form of damage from substandard roads, particularly in rural parts of the state.
“We need to invest in some parts of the state that need it the most. Slashing our budgets is not the way to go.”
The $71.25 million transportation bond
Question 6: Do you favor a $71,250,000 bond issue for improvements to highways and bridges, airports, public transit facilities, ferry and port facilities, including port and harbor structures, as well as funds for the LifeFlight Foundation that will make the State eligible for over $148,000,000 in federal and other matching funds?
One of the most important transportation-related questions on the November 3 ballot will be the $71.25 million transportation bond referendum.
“This bond is the heart of the MaineDOT program for the next two years,” said Maine Bettter Transportation Association Executive Director Maria Fuentes.
MaineDOT estimates the bond will generate $148 million in federal, local and private matching funds – bringing the total infrastructure investment to more than $219 million. (A breakdown of the programs included in the bond is on page 23.) The department also estimates highway and bridge projects in the bond will support 4,600 direct and indirect jobs.
How Mainers will vote on the bond referendum is difficult to predict. Still, Fuentes is guardedly optimistic.
“It is hard to know how this will turn out,” said Fuentes. “If you look at the issue of transportation investment from an historical perspective, chances are it will pass – easily. But there are other factors.”
One of those factors is the “taxpayer bill of rights” initiative (TABOR) on the ballot and a second ballot question that seeks to reduce the local excise tax on automobiles. Another is Mainers’ continuing anxiety over the economy.
“This is a tough economy and people are feeling the pinch,” said Fuentes. She said that campaigning by the TABOR II group might have a spillover effect that will pull support from the YES vote on the bond referendum. Still, she is positive about the prospects for the bond’s passage.
“Mainers typically come out strong for transportation investments,” said Fuentes who said that voters have passed every highway transportation bond since 1966 (Note: port and rail bonds have failed in the past, but not since they have been included as part of the highway bond package). “It is incumbent on the MBTA and others to get the word out to their members, and for companies to get the word out to their employees and others about what is in Question 6, the transportation bond.
“When people hear the message, they understand the connection between efficient, safe transportation and good jobs and quality of life. That’s why it’s so important we work hard to help this pass,” said Fuentes.
Here is a look in-depth on the proposed question and at what you are being asked to vote on.
What’s in the transportation bond?
Statewide highway and bridge investments: $55 million - Federal match $110 million
A major component of MaineDOT’s proposed $637 million statewide, two-year highway and bridge capital program. MaineDOT’s entire capital highway and bridge program will create 133 bridge projects, 200 miles of capital paving, and 17 miles of highway reconstruction. MaineDOT estimates the bond and federal match will support approximately 4,600 direct and indirect jobs.
Rail investments: $4 million - Private match $3 million
Critical Rail Corridors – $2 million
Includes a statewide rail plan study required for future federal passenger and freight rail funding. It will also establish a program that will encourage public-private partnerships and is expected to leverage $2 million in private investment.
Industrial Rail Access Program (IRAP) – $1 million
For matching grants to private businesses for freight rail infrastructure upgrades in order to move products via rail. The IRAP investment will leverage $1 million in private or local funds.
State-owned rail lines – $1 million
For capital upgrades to state-owned rail lines, including the Rockland Branch and the Lewiston Lower Rail Line.
Port and ferry improvements: $8.25 million - Federal match $11.75 million
Port of Eastport – $4.5 million
For bulk cargo handling facility to improve freight handling efficiency and diversify port customer base.
Searsport Harbor – $1.25 million
Part of state match needed for channel dredging project to enable state to market port to larger freight vessels. The Army Corps of Engineers is co-sponsor of the Searsport project and will provide the $11.75 million match. (Maine must secure an additional $3.5 million match by July 2011 for construction to proceed).
Ferry facilities – $1 million
To address critical capital maintenance of Maine State Ferry Service and Casco Bay Island Transit District vessels and facilities.
Gulf of Maine Research Institute – $1.5 million
To rebuild the bulkhead at the Gulf of Maine Research Institute in Portland (to be administered by the Department of Economic and Community Development).
Aviation improvements: $3.6 million - Federal match $57 million; local funds $1.5 million; LifeFlight match $500,000
Statewide aviation – $2.6 million
$1.5 million for grants for infrastructure improvements to publicly owned airports statewide. Projects include runway and taxiway reconstruction, safety improvements, and other enhancements to improve airport access and safety and to support economic development associated with air services in Maine.
$500,000 for transportation infrastructure at the Brunswick Naval Air Station. In addition, some funds are for pavement preservation to protect and extend previous investments.
Remaining $600,000 for capital improvements at the Augusta State Airport and the Island Airport Program.
LifeFlight – $1 million
To improve access and safety of LifeFlight’s emergency medical services in rural and island communities with automated weather observing stations (AWOS) and helicopter approaches (electronic maps) at designated landing zones.
Intermodal Investments: $400,000
Federal FTA match $800,000
Trenton intermodal facility – $0.4 million
For design of Phase II of the Acadia Gateway Intermodal Center, including National Park Service and large restroom facilities, bus berths and visitor parking. MaineDOT will build the facility and lease it to the National Park Service (NPS) to operate and maintain. NPS will lease space to the Mt. Desert Regional Chamber for tourism activities.
Questions of transportation
MBTA’s Maria Fuentes talks with Representative William P. Browne about the federal stimulus, MaineDOT paving cuts and the state of Maine’s transportation network.
Do you think Maine will see real benefits from the federal stimulus package?
Rep. Browne: Yes, we are seeing some benefits, certainly I-295 and some of the other projects. It has done partially what was intended in the short term, but I really don’t see any great long-term benefits.
What about Maine’s transportation infrastructure has hurt the state’s economy? What has helped the economy?
Rep. Browne: Our road system has helped the economy. We complain about our roads, but I was recently talking with some folks from other states – Rhode Island and Vermont – and they said Maine roads are better than theirs. It doesn’t mean our roads are ideal, but at least we know we have to take care of our roads, otherwise things will get even worse.
High fuel prices have hurt our economy, trucking and tourism in particular. Also, our rail system has been an impediment. If we can make rail more efficient and dependable, that would help the state.
What is the most critical transportation need facing the state? What about facing the people in your district?
Rep. Browne: Without a doubt, the most erratic situation we are facing is not having a sustainable funding source for highways and bridges. We absolutely need something more dependable. We cannot count on the fuel tax – it fluctuates too much – and we can’t keep funding other things with that fuel tax money, like the ferry system.
In my district, we need to make sure we can depend on URIP (Urban Rural Initiative Program) funding. We can live with what we have, but we never know what it is or when it is going to be cut.
The CanAm Connections study discusses transportation infrastructure in the Northeast border corridor and its effects on economic development opportunities. What steps do you think Maine should take to remove the barriers to global trade opportunities?
Rep. Browne: This doesn’t only impact Maine, but our No. 1 problem in terms of global trade is the interstate weight limits. We also need to have an east-west highway and extend interstate north of Houlton. We also need better rail service from Sears Island.
Based on what happened during this past session, the MaineDOT can only fund 250 miles of maintenance surface treatment (MST), when it should be funding 1,200 to 1,400 miles. Your thoughts?
Rep. Browne: Our budget priorities have to change. Funding transportation should be the highest priority of the Highway Fund budget. We are picking up more responsibility like the ferry system and shifting responsibility to the Highway Fund that should stay within the General Fund. We must increase capital expenditures – we can’t have them decrease while administrative costs increase. That is, in effect, what has happened when the Department of Administrative and Financial Services (DAFS) took over some of the administrative function of the Highway Fund.
What was the most significant transportation success this session? What was your biggest disappointment?
Rep. Browne: I am not sure we had any great success other than having a balanced budget that is required by our constitution. The biggest disappointment was the mess we got into with the MST program. We should have funded that program from our biennial Highway Fund budget and we didn’t.
Which airport do you most frequently fly out of? How many times a year do you fly?
Rep. Browne: Since we don’t have an airport in Vassalboro, I usually fly out of Portland, probably about two times per year.
Have you ever taken a ferry in Maine? How frequently?
Rep. Browne: Not in recent memory.
What is the most common constituent complaint you hear about transportation?
Rep. Browne: I hear complaints about the high cost of fuel, and toll increases, as well as road conditions. In my community, I hear complaints about not spending enough money on paving.
How have your transportation habits / commuting habits changed in the last year?
Rep. Browne: My habits haven’t changed, but I have had to adjust my fuel budget considerably. In my farming operation where I cut and sell hay, my fuel costs have almost doubled in the last couple of years.
What is the worst and best road you frequently travel on?
Rep. Browne: A couple of roads in Augusta – Mt. Vernon Avenue and State Street are pretty bad. The Middle Road in Sidney is also in terrible shape. Route 201 is in good shape.
Silver bullet eludes transportation committee
Impasse continues despite funding talks
What will fix the current transportation funding shortfall is a question – and answer – that has eluded efforts of the Maine Legislature’s Transportation Committee of late. The 13 legislators that sit on the committee met twice this summer to address the issue and discussed various scenarios – including a possible increase to the state fuel tax. Still, the second meeting in August concluded without consensus or recommendations from the committee. Members of the committee have said they plan to revisit funding talks as the legislature gears up for the 2010 legislative session.
The summer meetings of the Transportation Committee had been proposed during the final hours of the 2009 legislative session. The Maine House and Senate had been unable to agree to a funding Band-Aid for the state maintenance surface treatment (MST) program that had been cut drastically this spring.
During the regular legislative session, several bills had been proposed – each calling for various increases in the state gas tax. All failed to pass under pressure from Republicans who were wary of raising taxes. Additionally, Governor John Baldacci had threatened to veto any tax increase unless it had strong bipartisan support.
Raising the fuel tax was the chief funding mechanism discussed during the summer meetings. Maine motorists currently pay 29.5 cents per gallon in state fuel tax for gasoline and 30.7 cents for diesel. Fuel tax revenues had decreased during the past year – partially because dramatic price increases at the pump in 2008 had caused a historic decline in vehicle miles traveled. The decline in gas tax revenues continued into 2009, even as gas prices began to fall from their 2009 high, due to a deep recession that hit the region and the country.
To make revenue matters worse, Mainers have continued to seek more fuel-efficient vehicles. That, according to MaineDOT, has contributed even more to the recent decline in fuel tax revenues than gas prices – and promises to continue creating downward pressure on revenues.
Fuel tax revenue shortfalls caused MaineDOT to cancel 75 percent of its 2010-2011 MST paving program. And with the prospect of declining revenues for fiscal year 2010, the legislature reduced the proposed transportation bond from $127.8 million to $72 million, disappointing both highway advocates and rail, transit and marine users. “This is a hard period for transportation,” a clearly discouraged Transportation Committee House Chair Edward J. Mazurek (D-Rockland) told Maine Trails at the close of the special session. “The budget we passed is bare bones and less than the year before.”
Mazurek sees the highway funding struggle faced by the 124th Maine Legislature as indicative of a longer term funding issue. “The present method of relying on the gas tax is not working. The gap is widening between what we can afford and what we need to do,” said Mazurek.
One bright spot came in August when the state announced that July gas tax revenues posted $1.3 million – or 7.6 percent – higher than anticipated. Motor vehicle registration fees, a portion of which are used for bridge repair, also showed a 25 percent gain after a long decline, in large part because of the federal “Cash for Clunkers” program devised to stimulate flagging automobile sales. Many anticipate auto sales will fall off significantly now that the program has ended. It is unclear why July fuel tax revenues were higher than anticipated; it may be a timing issue relative to reporting receipts.
Senator Dennis Damon (D-Hancock), who co-chairs the Transportation Committee with Rep. Mazurek, was cautiously optimistic about the increasing transportation revenues in an interview with the Capitol News Service: “Overall, I would have to say that the analysis for the first month of the fiscal year – July, that is – is positive. Let’s see if we can’t tack a few of these together back-to-back, and see if we can come out of where we are, because it was in a pretty terrible place.”
Right brain, left brain
Jay and Heidi Shorette bring diverse management styles to a new challenge at Dirigo Slipform
By Kathryn Buxton
Jay is the creative, right brain personality. Working in the construction industry since 1979, he has become known for his zest for a new challenge and ability to find innovative solutions at the job site. Heidi is more “left-brain” – analytical, logical and definitely has a good understanding of numbers. She worked in banking and finance for 20 years and knows her way around a balance sheet.
So when the opportunity came to buy Dirigo Slipform, the company Jay had helped Herb Sargent establish in 1997, the Shorettes were able to look at the proposition from two solid, but different perspectives. Jay, who with Sargent, had helped introduce a new construction technique to Maine, saw the chance to continue to grow and create new applications in the slipform industry. Heidi, who had retired from full-time banking several years ago, saw a solid business opportunity with a company both Shorettes know from the inside out.
“My piece is accounting and administration,” said Heidi who is the company’s new president. She joined the company in that full-time capacity at the beginning of August, but she has been on board part-time since the Shorettes signed the papers purchasing Dirigo Slipform from Sargent in June. Those first couple of months she was balancing two jobs – a long-term temporary position with a local accounting firm and her new role at Dirigo.
Anyone can tell the Shorettes enjoy each other and relish the prospect of this new challenge. Both grew up in Maine: Jay is from Old Town and Heidi grew up in Limestone. They met at Beal College in Bangor September 1978 and married in May 1980.
During that period, Jay also began his career in construction. He had been paying for college by working full-time as an assistant manager at a local grocery store when he applied for a job with H.E Sargent. He soon realized that in construction hard work paid off – that he could earn in nine or 10 months of the year more than he could working a full year in retail.
He also liked the work and the challenge of construction. “H.E. Sargent was a great organization,” said Jay who worked for Sargent for 12 years – under Herbert E. Sargent, Jim Sargent and John Simpson, who headed the company after the Sargent family sold H.E. Sargent in 1988 to French construction giant Razel. Jay eventually worked his way up to supervisor.
The Shorettes are no strangers to entreprenuership or hard work. They first worked together at MacGyver Construction, the general contracting firm they founded in the early 1990s before Jay joined Dirigo full-time.
At the time, Heidi was still working as assistant manager for a Key Bank branch in Old Town. Jay was working as a supervisor for H.E. Sargent, but looking to earn extra income during the winter months. The new company was named for the popular television show MacGyver that ran for seven seasons. In the series, the resourceful hero, played by Richard Dean Anderson, frequently saved the world from disaster with little more than a tube of toothpaste and a ball of string.
Jay Shorette fashioned his new company on that same can-do philosophy. MacGyver Construction soon grew from a part-time venture to a full-time occupation, and Jay left H.E. Sargent with his former employer’s blessing.
“They said, ‘Try it. If it doesn’t work out, you’re welcome to come back,’” recalled Jay. In fact, Herb Sargent frequently used MacGyver as a subcontractor in the construction company he founded in 1991, Sargent & Sargent and the new company also did work for H.E. Sargent, as well.
Running MacGyver gave Jay a chance to sharpen his leadership skills as head of his own contracting company. It also nurtured his creative side. At MacGyver, he frequently was called on to find cost-effective solutions for his clients. “Our motto was ‘We can make it work,’” said Jay. For Heidi, it required late nights issuing invoices and payroll checks from the company’s “office” in the family’s spare bedroom. It was hard work – “Not every day was cupcakes,” said Heidi.
MacGyver was growing, but then Herb Sargent came to Jay with an offer he found difficult to refuse. Sargent recruited Jay to help him launch Dirigo Slipform and introduce the concept of slipform concrete – a then little known process – to the construction industry in Maine.
“We were using MacGyver a lot as a subcontractor, and his work was always good,” said Herb Sargent, owner of Sargent Corp. “When I considered purchasing a slipform machine, Jay was the one to talk to.”
Sargent and Shorette traveled to Salisbury, North Carolina, to see one of the slipform machines in action. It was apparent the new business would require a steep learning curve and, foremost, consistency to master the technique.
Because the concrete technique was relatively new to Maine, it required a significant marketing effort to get the word out, as well. “It was a new way of doing it, and I had to give many, many lunchbox presentations to engineers and architects,” said Jay.
Sargent said that Jay’s enthusiasm and creativity over the years has contributed to the expanding popularity of slipform concrete in the region. “It’s great product and finding new ways to use it is where Jay shines,” said Sargent. “He’s always thinking about new ways to sell it and new ways to help his customers.”
The slipform process is used to install concrete curbing, sidewalks, barriers and drives (Dirigo also specializes in installing granite curbing). Slipform concrete has gained popularity over the past decade, because it is both cost-effective and durable. It performs well in the northeast where, during the winter, plows can chew up more traditional asphalt curbing. It is also flexible – it can be installed at various stages in a project, even before any asphalt is laid.
“You have to do this every day,” said Jay, in order to have a feeling for the machinery and how to work the concrete so it is functional, durable and aesthetically appealing. Today, Dirigo’s crews are all industry certified and can be found at work on municipal, state and commercial construction projects throughout Maine, Massachusetts and New Hampshire. Last year, the company put down approximately 130,000 linear feet of slipform concrete, 80,000 linear feet of granite curbing, and 40,000 square feet of concrete walks and stamped concrete.
Recently, Jay said the company has devised a process for bonding its slipformed concrete curbing to asphalt with an epoxy binder. The result, said Jay, is a product that “has taken off like a rocket.”
It’s that innovation and creative approach that has won Dirigo Slipform awards from the Northern New England Concrete Promotion Council for Outstanding Concrete Construction in “concrete paving and slipform concrete” nine years in a row.
Over the past 10 years, the company has found challenges in community service, as well. Dirigo helped construct a winter ice skating rink on the shore of Penobscot River in Bangor. The company also has donated its services for refurbishing several veterans memorials and the grounds of several VFW (Veterans of Foreign Wars) halls in Maine. Dirigo has helped build homes for Habitat for Humanity. And Jay and Heidi co-chaired the 2008 annual fund campaign at the Old Town-Orono YMCA (Jay is on the Y’s board of directors). They are proud to mention that the campaign exceeded its fundraising goal, despite the slow economy. Since its founding, the company has been a generous supporter of MBTA, as well, and Jay has been a longtime member of the MBTA’s Membership Committee.
Previous to buying Dirigo Slipform, the Shorettes tried their hand at “flipping.” They bought a Milford eyesore, a house that was in deplorable condition and completely rehabbed it. The project proved a test of the couple’s ability to work closely together after succeeding for more than 10 years at MacGyver Construction. Heidi was the “G.C.” (general contractor) and together they did all the work on the project themselves except for plumbing and heating, electrical, and flooring.
This fall, Heidi will continue the work of getting Dirigo Slipform certified by the state as a woman-owned business and she is genuinely excited about launching a new career in construction with the help of her husband.
“It’s the chance of a lifetime for us,” said Heidi who admits to being nervous but confident in the decision to take business ownership on. “In the end, you’ve got to trust your gut.”
25 Dempsey-Greaves Lane,
P.O. Box 340,
Stillwater, Maine 04489
Tel: 207-827-0100| Fax: 207-827-0101
Founded in 1997 by Herb Sargent.
Purchased in 2009 by Jay and Heidi Shorette.
Manufactures slipform concrete curbs, sidewalks, barriers and drives. Installer of granite curbing.
A fresh outlook
Brothers Mike and Claude Cloutier lead their family-owned company into a new market
By Kathryn Buxton
It is a busy morning at the new RC & Sons Paving plant in Augusta. A succession of trucks rumble into the quarry, pull up to the twin silos, fill up with hot mix asphalt and leave for job sites throughout the area. Even in the midst of a hectic morning, it is impossible to overlook stunning views from the plant. It is late summer and the rolling hills of northwest Augusta are hazy shades of deep green and blue.
Brothers Mike and Claude Cloutier are understandably proud of RC & Sons’ new views – both outside and inside the new asphalt plant. The Augusta site is the company’s second major expansion within the past decade. And after having the company operations based in Lewiston-Auburn for more than three decades, the Augusta plant has given RC & Sons a firm foothold in a new market.
RC & Sons Paving was founded in 1976 by Mike and Claude’s grandfather Romeo Cloutier and their father and uncle Maurice and Richard Cloutier. Their base of operations was Lewiston. After Romeo retired, Maurice bought out his brother’s share of the business in 2000. By that time Maurice had been joined in this business by his two sons, Mike and Claude, and in 2003 they opened RC & Sons’ first asphalt-producing plant in Auburn in 2003.
Today, Maurice is company president, while Mike and Claude share the title of vice president. Like the generation before them, they are partners with their father in the business. Claude oversees quality control and the company’s finances, including estimating; Mike oversees operations and human resources. Family is key to their success. Mike and Claude’s mom Claire works in the Lewiston office. Mike’s father-in-law Eric O’Connor works as an equipment operator. Mike’s son Scott and Claude’s daughter Taylor both have worked summers for the paving company. And Mike said his 12-year-old daughter Brittany likes to come along on jobs and has been known to throw in her “two cents” on how to run things. Mike said he “wouldn’t be surprised” if she decided to join the family business, as well.
The company’s growth has been slow and steady. A few years ago, they decided they wanted to test the waters and began bidding on work around Augusta. They have worked with CPM Constructors on two bridge projects in the area and were the paving contractor on several commercial projects, including the Augusta Crossing shopping plaza that opened in late 2007. They also had done paving projects for several nearby towns, including Readfield, Fayette and Monmouth.
“We’ve been doing jobs up here for a while, and there seemed to be the opportunity,” said Claude. So, as the 2008 paving season wound down, the Cloutiers began to crunch numbers and consider expansion in earnest. The only question was where and what.
The “where” turned out to be at the site of an existing quarry owned by Steven McGee Construction, just off West River Road in Augusta. RC & Sons leases the site and purchases the graded material needed for asphalt paving from McGee.
The “what” is a 120-ton-per-hour ALmix drum plant the company purchased second hand this spring from an Alabama paving contractor that was downsizing. The Cloutiers liked the idea of the ALmix plant, because it was nearly identical in size and set-up to their plant in Auburn. They knew that would speed their start-up and training time. Claude Cloutier and RC & Sons’ operations manager Dennis Spencer flew down to Alabama to inspect it this spring and finalize the purchase. The plant was shipped to Maine and constructed in May. The plant began operating in early June.
Mike said the expansion went smoothly because they have worked in the Augusta market before and were familiar with the plant set up and operation. “We knew what we were getting into,” said Mike. Still, there were many details along the way.
The Cloutiers had to test material at the McGee quarry to make sure that it had the right qualities for asphalt mix. They also had to prepare the site for the asphalt plant and secure permits for hauling. (McGee already had permitted the site for an asphalt plant when it established its quarry there).
RC & Sons also went on a hiring spree, taking on four new employees to staff the Augusta site and a full paving crew of nine. That brought the company’s total work force to 43 at the two plants and central office in Lewiston.
The new plant also was a size that the Cloutiers knew could fill a niche in the market. The expansion, said Mike, was a carefully calculated investment. At 120 tons per hour, the new plant makes RC & Sons extremely competitive on a variety of commercial, municipal and state jobs in the Augusta area.
They knew this from experience. Their Auburn plant has proven that, by being small and flexible, they are not only competitive but able to squeeze more paving days out of the short Maine construction season.
Their clients appreciate that flexibility, said Mike, and that is why in recent years they have been able to operate 10 months out of the year when the weather holds and the demand is there.
“Last year it was 11 months,” said Mike, who said that RC & Sons was the paving subcontractor on an emergency job for MaineDOT in January. The company paved the approaches to a temporary bridge crossing the Cobbosseecontee Stream. CPM Constructors of Freeport was the primary.
“We were lucky on that one. It was 40 degrees the day we paved, and the next day there was a big snowstorm,” recalled Mike.
Even as the Cloutiers were gearing up for the expansion, Mike was taking on a new personal challenge. This year, he was elected president of the Maine Asphalt Pavement Association, an industry organization active in promoting safety, education and technological advancements in paving. The company is also a member of MBTA and the Maine Chapter of the Associated Builders and Constructors, Inc. and a sponsor of a Little League team in their hometown.
Both brothers admit to having occasional doubts about the wisdom of expanding at a time when many businesses are downsizing. But for now, the outlook looks bright. The new plant has attracted a steady stream of work – from small firms hauling for the residential market to municipal and state paving projects. In fact, both plants have been busy producing asphalt for projects spanning the map of southern and central Maine.
Not all of the work has been modest-sized projects. The company just landed a sizable job – it calls for 41,000 tons of hot mix – as the paving sub for the 11-mile reconstruction of Route 9 near Sabattus. The job is one of several projects the company is working on that is being funded by federal stimulus legislation passed earlier this year by Congress. (K & K Excavation of Turner is the primary on the project.)
The key, according to Mike, is not whether the project is big or small. It’s whether the customer gets what they want and need. “Our motto used to be ‘a small family company doing big business,’” said Mike. “But the truth is we’re a very customer oriented business. We’re small enough to take care of the customer.”
RC and Sons Paving
942 Main Street
Lewiston, Maine 04240-5175
Paving contractor with hot mix asphalt plants in Augusta and Auburn
Transportation by the numbers
By Bruce A. Van Note, MaineDOT Deputy Commissioner
The mission of the Maine Department of Transportation (MaineDOT) is to responsibly provide a safe, efficient and reliable transportation system that supports economic opportunity and quality of life throughout the state. The economic challenges affecting all of us today are making it more difficult to get this critical job done. MaineDOT is not alone. DOT’s across the country are dealing with similar challenges. As always, MaineDOT will continue to do the best we can with what we have.
As we all prioritize to meet our transportation challenges ahead, some basic transportation-related numbers may provide a useful context. Of course, no list can be exhaustive. We welcome all requests for information. We believe the more you know about MaineDOT and transportation in Maine, the better. Feel free to contact us at www.mainedot.gov.
- 42,400 The number of jobs, direct and indirect, supported by MaineDOT’s capital programs over the last five years.
- 4 The number of months that it took MaineDOT to advertise 100 percent of the $130.7 million in highway and bridge formula funds contained in the federal American Recovery and Reinvestment Act of 2009 (ARRA), sometimes known as the “stimulus package.” Maine is at or near the top of any list on transportation ARRA delivery.
- 0 The amount of ARRA highway and bridge formula funds available to advertise projects in future years.
- +60% The percentage increase in construction costs MaineDOT has experienced over the last five years.
- +12% Consumer Price Index (CPI) inflation over the last five years.
- -6% The percentage decrease in MaineDOT’s state highway budget funding over the last five years.
- 60% The percentage of all MaineDOT funding (including federal funds, bonding, etc.) that goes to private enterprise including contractors, consultants, and vendors.
- 197 The number of MaineDOT positions eliminated over the last five years, accounting for a workforce reduction of almost 9 percent.
- 53 The number of heavy trucks eliminated by MaineDOT over the last 5 years. (Replacement value: almost $7 million).
- $282 The estimated annual maintenance costs per Maine motorist caused by bad roads, as estimated by the Maine Development Foundation.
- $6 How much a Maine driver pays per penny of gas tax, based on an average annual miles driven of 15,000 in a vehicle that gets 25 miles per gallon.
- 8,408 The number of centerline miles of highway for which MaineDOT has primary capital responsibility. The analogous number for New Hampshire is 3,990 miles, meaning MaineDOT has more than double its nearest neighbor’s miles to care for — or 110 percent more miles.
- 13% How much more Maine receives in federal highway funds compared to New Hampshire.
- 29.5 The Maine state gasoline tax per gallon (in cents). By way of comparison, the national average is 28.6 cents, the New England average is 27.1 cents, New Hampshire is 19.6 cents, Nova Scotia is 58.8 cents, Quebec is 57.6 cents, and Great Britain is $3.99.
- 1993 The year the U.S. Congress last adjusted the federal gasoline tax. For the past 16 years, it has remained at 18.4 cents.
- 0 The amount of additional revenue generated when pump prices rise, as the gasoline tax is assessed per gallon, and not the pump price.
- 470,000 The number of passengers riding the Amtrak Downeaster over the last year, a 7 percent increase over the previous year.
- 80 The number of transit buses that have reached the end of their estimated useful life out of a statewide fleet of 412.
- 17 The number of feet of snow that fell in Caribou during the winter of 2007-08.
- 110,000 The average number of tons of salt that MaineDOT uses each winter season.
- 20 The number of national awards won by the Penobscot Narrows Bridge and Observatory.
- 99.4% The percentage of days the Maine State Ferry System operated over the past five years.