Answers and questions
Economist tackles big questions, warns of consequences of transportation decline at MBTA Cumberland County Meeting
If you have to get bad news, you’d want it given to you the way University of Southern Maine economist Dr. Charles Colgan delivers it: in plain English with plenty of empathy and dry humor. Colgan was the featured speaker at the 2013 MBTA Cumberland County Meeting, March 14 at the Portland Marriott Hotel in South Portland.
The meeting is one of several regional issues forums held every year by the Maine Better Transportation Association, and it began with MBTA President Doug Hermann welcoming the collection of MBTA members, family and friends in the audience. The audience also included state and local politicians: Representative Andrew MacLean (D-Gorham), a freshman member of the Maine Legislature’s Joint Committee on Transportation, and Representative Ben Chipman (I-Portland). Local communities were also well represented at the meeting with officials from Gorham, Portland, Saco and Cape Elizabeth attending.
Hermann spoke about ongoing efforts by the MBTA Board of Directors, including support for two transportation bond proposals currently under consideration at the state house: a $120 million general fund bond issue and an $80 million GARVEE bond (grant anticipation revenue vehicle), both sponsored by Transportation Committee Chair Senator Edward Mazurek (D-Knox County). He mentioned the board’s Funding Task Force that is launching a fundraising effort for a long-term grassroots campaign to raise public and legislative support for transportation investment (you can read more about that in “Fix It Now!,” also in this edition of Maine Trails).
And then Colgan stepped up to the podium.
Begin at the end
Dr. Colgan, who holds the Russell Chair of Education and Philosophy at the University of Southern Maine, began his talk where most presentations end, with an extended question-and-answer session. In fact, Colgan first took on the big questions that were on nearly everyone’s mind.
“Is the recession over?”
Colgan’s answer: “No.”
“Is Maine’s economy finally moving ahead?”
“I don’t know,” said Colgan leaning into the microphone. He cited federal and state employment figures that showed how many jobs were lost at the peak of the recession: 8 million jobs in the U.S. and 30,000 jobs in Maine. Nationally, we have regained slightly more than half of those jobs, but in Maine, we are only 2,000 jobs ahead of 2009. He estimated that based on current data, it will take Maine another 20 months to return to pre-recession employment levels. That means, while it will take the U.S an estimated 78 months to recover, Maine’s economy is on a slower track, with the recovery extending 93 months. And Maine is not alone, according to Colgan. The entire region’s recovery is lagging.
Transportation and other trends
His next question was, “What’s happening to transportation in the recovery?” And that was where Colgan pointed to the ambiguities that are at the heart of the struggling economy. On the upside, trucking employment is rebounding, and Americans are buying more new cars. On a less positive note, he spoke about soft transportation wages in New England and weak economic markers that remain volatile with the exception of a few recent peaks. Also, one key marker of the transportation economy, vehicle miles traveled, has dropped off dramatically, particularly in rural areas. That, he said, will have long-term ramifications, negatively impacting fuel tax revenues, the major source of revenue for road and bridge repairs.
Colgan also touched on several other trends that promise to have a lasting effect on the state, including a dramatic shift in population growth away from suburban areas to urban centers such as Bangor, Lewiston, Portland and South Portland.
“Cities are beginning to grow for the first time in 40 years,” said Colgan.
He also talked about patterns of job growth that during the past two years have seen the majority of new jobs being created in the private sector, largely because state and local governments have been hard hit by budget cuts.
The power of politics
He wrapped up his talk with a look at the power politics holds over the economy and how political strife and the inability of parties to forge compromise threatens to further restrain Maine and the national economy.
With the sequester now in place, Colgan noted that airports would be one of the first areas in the transportation sector to feel the reach of the automatic federal spending cuts passed by the last Congress (those cuts affecting air traffic control operations at regional airports kicked in in mid-April of this year). He noted that public sector jobs would continue to decline as more federal cuts from the sequester began to take hold.
And then he asked the question everybody has been asking: “Will we get out of this budget mess?”
His answer and his 2013 economic forecast in a nutshell: “I don’t think so,” was not particularly positive either.
“We are facing the biggest divide in American politics since the Civil War, and that didn’t turn out too well,” said Colgan, adding the political impasse that is currently having a devastating impact on the economy only promises to become even more rancorous as Congress takes up the topic of the debt ceiling and other contentious issues.
At that, Colgan projected an image of a bag of cold patch asphalt on the screen and warned of the consequences of becoming “The United States of Cold Patch” if our leaders do not find a way to make difficult decisions about funding public infrastructure and other essential services.
“What is going to happen? Are we going to get out of this mess?” asked Colgan closing out his remarks. “I don’t think so.”
The evening closed with announcement of the 50/50 Raffle winner. John Harbottle of the Rowley Agency took home the cash prize: $190 (another $190 went to the MBTA’s scholarship fund).
FMI: The MBTA holds annual regional meetings in South Portland, Augusta, Presque Isle and Eastport. For more information, visit www.MBTAonline.org.