Independent gubernatorial candidate Eliot Cutler spent an hour with the MFPC Board on May 8, telling them how strongly he believes in “substantial equality of opportunity,” because with opportunity comes at least the possibility of success.
“And the biggest problem that we have in Maine today is that for too many people in Maine, young and old, there is not opportunity and there can be no success,” Cutler said, citing 11 straight years of a decline in economic activity.
Cutler pointed to a Millinocket City Council meeting he attended recently in which the first half of the meeting was spent “disposing” of tax-acquired homes and the second half on the possibility of filing for municipal bankruptcy.
“It was a town of 7,800 people not long ago, when I was growing up. It’s now 4,400 and their budget planning is for a town of 2,500,” Cutler said. “That town and their neighbor East Millinocket, as you all know, are owed millions and millions of dollars in unpaid taxes. But just as bad are the vendors in the Katahdin region and throughout the state who are owed hundreds and hundreds and hundreds of thousands of dollars. All by the latest savior to arrive in the region. And when there’s no plan and no strategy to build – to rebuild – Maine’s economy, that’s what we’re going to end up with. Our demographics and the current state of our economy combine to put us right on the edge.”
He asked for the board’s help in turning around the state’s economy, and added,” I’d like to hear what you think and I’d like to try and answer your questions.”
Below are the questions, which ranged from the economy, to 21st century wood products, to LUPC, with excerpts from Cutler’s answers. They have been edited for length, continuity and clarity.
Peter Triandafillou, Huber Resources: I read your platform (A State of Opportunity) and there was some interesting stuff in there. I’d like to get your perspective and what you would think of the idea. There are states in the United States that are prospering, North Carolina, Georgia, what would you think of really studying those states? What are they doing that we’re not? So we could figure out if there are things there that we’d like to emulate or not. But at least figure out what’s happening in the places where jobs are being created hand over fist, other than Maine, what are the differences? What do you think of that?
Cutler: In that book, in the beginning, there’s a chapter on North Carolina. Not because I think North Carolina is a great place to be today – because I don’t – but because there’s a fundamental lesson that we should learn, I think, from North Carolina, back in the 1960s and ’70s . . . Unlike us in Maine, the people in North Carolina understood that they were living in an increasingly global economy and that those mills and factories were not going to be there forever . . . So the governor at the time, a guy named Terry Sanford, pulled together the leaders of business and academics and political leaders in the state. And they said, “What are we going to do? Because we no longer have the kind of agricultural economy we once had, because all of those people have come into the cities to work in these mills. So what are we going to do when the mills leave? What are our competitive advantages?” And they said, “Aha! We’ve got these three universities – Duke, North Carolina State and the University of North Carolina. And they weren’t talking about basketball. They were talking about research and they created Research Triangle Park. Today there are 50,000 employees in Research Triangle Park at an average income that comes far above ours. But what the important point here was that they focused on their competitive advantages and they had a plan to leverage those advantages into opportunities to replace what they were losing because they were no longer competing in an American economy of 100 million or 200 million people. They were moving into a time – which we’re smack in the middle of now – where we’re competing with 5 billion or 6 billion people around the world . . . And their average incomes in North Carolina shot up. They went from nowheresville to 90 percent of the national average . . . Now I’ve got two opponents. One of whom thinks “plan” is a four-letter word and one who thinks plan is spelled p-r-o-g-r-a-m. Neither is going to work. So in my view, the responsibility of a governor is to do what Terry Sanford did in North Carolina. Focus people on the future. Not between now and the next election but between now and 20 years from now or 40 years from now. Plan how to invest.”
Sherry Huber, Maine Tree Foundation: Picking up on what you just said, I’d like to ask how much have you looked at and how much credibility do you place in the idea – that I happen to think has real value for the future – and that is bringing back a more robust manufacturing base that looks at wood as the renewable resource for 21st century wood products? There’s nothing wrong with wood and paper, but in addition to a whole new gamut of products, which will not only will pay better, but because they have higher value they will rebound through the whole economy. Have you spent some time on that subject?
Cutler: I have. I absolutely have. And I think that if you step back and you look at the world markets and the domestic markets for wood fiber products, ranging from pulp and paper to furniture and composites and all kinds of other things, what you find is that over time the demand for some of those products are declining and the demand for others are rising. And the smart thing to do is pay most of our attention to what’s rising, not what’s falling. It’s the point about looking in the rear-view mirror, which we do and have done for so long in Maine. When I was in Millinocket a couple of weeks ago and in Ashland a couple of weeks before that, I spent a day with Don Tardie at the Moosewood flooring mill and at the Seven Islands mill. I spent a lot of time in Millinocket with the guys who are making products out of the reclaimed wood from the lake. You all know, I assume, how I feel about Cate Street. I’ve certainly given you a couple of clues. The hydropower, the $40 electricity from the river, isn’t just available to Cate Street. It’s available to anyone who wants to do a sawmill, wood products manufacturing, you name it. In the Katahdin region. That’s important. That’s important.
We’re always going to be making paper in Maine – I think. We’re certainly going to be making pulp. But we also ought to be making a whole, whole, whole lot more of other wood products. What I proposed in Millinocket, what I said to the Chamber of Commerce was – I mean I love that region. I grew up in its shadow – and I said, “Look, I will personally lead an effort to develop an economic plan for this region that takes advantage in every respect possible of the competitive advantages you have, which is wood fiber, the river, the people, the communities. I think that pushes you in the direction – has to push you in the direction! – of looking at new markets and new products and trying as hard as we can to build that , meeting rising demand instead of sitting on our hands.
Jim Robbins Sr.: Eliot, you talked about the opportunity for making wooden products in the Millinocket area . . . But to do that we’ve got to have wood fiber and we’re concerned about what a national park might do to our wood fiber. I read your comments in the Bangor Daily and it sounds like you might be in favor of that park. Will you explain yourself on that issue?
Cutler: Absolutely. I can’t remember whether it was the morning after that city council meeting or during the day before the city council meeting, when I met with the Chamber of Commerce in Millinocket, who are so discouraged and who have been so burned by the latest savior to appear on the scene, that they have now taken a position in favor of a national park. Not the North Woods – I mean let’s get off the table this whole Restore, 3.5 million acres – I mean I’ll stomp all over that no matter what. But what they favor, is they’ve now taken a position in favor of a national park, the Quimby holding, which is, I don’t know, 76,000 acres or something like that.
What I have said is this, I will personally lead an effort to figure out how to redevelop the Katahdin region as an economy, based on its competitive advantages, which are principally wood fiber, the river, the people and the communities. That means, for example, using the cheap hydro for new manufacturing of wood products. It also means using or tapping into the recreation and tourism potential inherent in where Millinocket sits and in what the world’s demography increasingly looks like. I said that could possibly include a national park, a national recreation area, state park, expanded state park . . . Tourism is Maine’s biggest industry. It’s huge. But we fail to brand it . . .
If I thought for one minute that it would threaten in any significant way the livelihoods of people who work in the woods or the products we make from the woods, I wouldn’t be for it. But this potentially an opportunity to turn around a region that is suffering badly and deeply . . .And if and when, God forbid, Millinocket goes bankrupt, it’s not just going to be Millinocket’s problem, it’s going to be Maine’s problem, it’s going to affect our credit rating. We have got to pick up that region and make it sing again. And it’s not going to be the same song that was sung 40 years ago.
Cutler: Familiar enough.
Lamond: So can you talk about it? Because we’re all working through a process to try and improve on the permitting process in that region.
Cutler: I want to help you do it.
Lamond: Because that’s a mess. That’s 10 million acres, a lot of which will never be developed, but some of which should be. And you can’t now, the way it’s set up.
Cutler: I talk about the Plum Creek experience all the time because I consider it to have been the poster child for failure – the failure of a planning and regulatory process. And it stands up there – I remember saying this in 2010 – it’s like a blinking neon light that says, “Don’t invest here.”
And it’s not because our standards – our standards are good standards. They’re standards that we ought to hold to because this is our most precious resource. These resources are our most precious advantage. But the process – I mean I can tell you story, after story, after story. If you campaign for governor as long as I’ve been campaigning for governor, you’re going to hear every story in the book and they’re all true . . .
So I said, if I am going to be defending most of our standards for taking care of our resources, I’ve got to make sure that we can do it responsibly. And the way we’re going to do it is have two or three people going through Maine rules and regulations and programs and getting rid of those that give us a lousy return on investment or don’t work or stop people from investing. One of the biggest changes that I’ve suggested – and I suggested last time and I still think it’s the right thing – is to get rid of the Board of Environmental Protection and replace it with a three-judge panel of professional experts that provide for a state’s appellate review of EPA decisions. But I mean goodness gracious, you can go back and forth – as Plum Creek knows – between the DEP and the Board or between the Board and, in the old days, LURC, and you’ll never find your way out.
We’ve got to make Maine a place where you can invest. Reasonably, with reasonable standards that protect our resources, but where you can invest. And I’m committed to doing that and I’ve said it over and over and over again.
Terry Walters, Pleasant River Lumber: The forest products industry and the council represent the resource and the manufacturing base and I think there’s one thing everyone in this room has concern about – our relationship with government. At one time we had a Department of Forestry, then we go merged into the Department of Conservation, which had a Bureau of Forestry, and now we’ve got merged in with Agriculture and we have a Division of Forestry. So I think we’re all feeling that we’re losing representation and we’re getting lost in the bureaucracy. I’m just wondering you would do as governor to represent our interests?
Cutler: It’s interesting about agriculture and forestry. There are a lot of similar issues. They are two of Maine’s, in my view, greatest potential growth sectors. Why? Because we’ve got the forests – millions of acres – hundreds of thousands of acres of arable land, much of it lying fallow today – not reforested, fallow. Markets closer than they’ve ever been, in terms of time to market. Etc. Etc. Etc.
And, oh by the way, more water than we know what to do with. And I’ve been uncertain about the merged departments. Not just this one but DHHS as well. Because moving boxes around doesn’t spell success always and sometimes you create a department that’s just too damn big. Or you’ve merged two activities that on the surface look the same or similar, but in fact really aren’t. And there are some big differences, for example, between agriculture and forestry. One’s a 30-year growing season and one’s a six-month growing season. Pretty different.
Let me also say, and I won’t say where this comes from, but more than once I’ve heard concerns about the state forester and about whether if I become governor I’m going to replace Doug (Denico). And I have a lot of admiration and respect for Doug and I’ve told him personal that I have no interest whatsoever in someone new. I think he’s terrific. I got to know him four years ago and I liked him.
You don’t change, in my view, structures and people for the hell of it. You don’t do it in order to make something look different. Making something behave differently and achieve more is a much harder job and that’s the job I’m going to try to do. So I’m going to look at it. I don’t have any judgments yet about it. But I’m going to look at it.
Ron Lovaglio, consultant and former Maine Conservation commissioner: You alluded to Mike Michaud’s organization and the elephant in the room is that you’re probably the underdog and how do you separate yourself and get the votes you need. So that people are fired up and say, “Gee, this Eliot Cutler is going to take us where we want to go.” How do you get that separation?
Cutler: Well the first thing you do is what I’ve been doing now for a couple of years and that is spending six and a half days every week meeting with people all over the state. I’ll be in Ashland one week, be in Sanford the next week, be in Millinocket, and Bangor and L-A, Waterville, Augusta and Fort Kent.
Number two, I take a lot of encouragement in the fact that in June of 2010 we were 3 percent in the polls. We’re now at 20. We didn’t pass 20 in 2010 until Oct. 12. So in terms of having a foundation, I feel pretty good about that. Third, people don’t pay attention except you guys and a few others. Most people have no idea who the candidates are, when the election is . . . The most significant discovery I’ve made about politics this year is how short the half-life of name recognition is. On Election Day when I lost by 9,000 votes in 2010, 95 percent of the people who voted knew who I was. Today, by our measurement, it’s about 65 percent. I started at about 45 percent or 30 in one poll.
Now I’m running against two guys whose name recognition – for better or worse for each of them – is about 95 percent because they’re incumbents. So they’ve got about 30 points on me right now. My favorables, if you really want to get into the weeds, are dramatically good. Which means that increment of 30 percent between me and them, which is going to close, is going to propel me. I’m either going to win this race by a little in a squeaker – 30s, 30s, 30s – or I’m going to win it by a lot. In the 40s. And I think the likelihood of the second outcome is greater than the first. This is a three-way race, the dynamics very different, very fluid. Most of Michaud’s support is very soft. Most of LePage’s is hard, but about a quarter of it is soft.
You know, the choice the parties have given Maine voters is between something that’s not working now and something that didn’t work before. That’s a lousy choice and I’m spoiling that choice. I think when the debates begin in the fall, when they can’t run anymore and hide – because that’s what they’re doing now – we’re going to do just fine. And I’m looking forward to it. So what I say to folks is, “Look, if you think that I’d be the best governor then put my bumper sticker on my truck, put my lawn sign on your fence or on your lawn. Tell your friends and neighbors who you’re for and why. Stick with me. And if you don’t think on Election Day that I can win, then bless you, go vote for someone else. But if everyone in Maine who thinks I’d be the best governor does what I’ve just asked you to do, we’re going to win in a walk. And I think that’s just what’s going to happen. Six months from now is a long time.
Patrick Strauch, MFPC executive director: Could you talk a little bit about your energy policy? We’re a mixed group here, we’ve got manufacturers who certainly want lower energy costs, we’ve got landowners who benefit from windmills and certainly biomass energy is important to us. I remember you talking about some way to create an entity that would help capitalize building the natural gas infrastructure. I think we’ve started doing that.
Cutler: Well, we have and we haven’t. Let me speak to that. For those who are interested, this week in Bangor we issued an energy and environment policy statement. But I think that we have both future opportunity in Maine, and again, I’m looking at this over 40 years, not today. Today’s need is natural gas and I’m going to talk about my proposal. Today’s need is natural gas because it’s the cheapest form of fossil energy we can get our hands on and we need it all over the state. But the other need we have in Maine is to make the most of our renewables – biomass, biofuels, geothermal, wind, solar. I mean the price of solar panels is plunging. There’s a lot we can do. We have a lot of sun in Maine. Sometimes it’s hard to believe, but we’re very good in that respect. Very lucky. And we need to move in the direction of lower carbon-content fuels in our transportation sector . . .
I’ve never believed, I don’t believe today, that a regulator also ought to be a promoter. And so I’m not comfortable with the long-term contracting authority that resides in the PUC. I’m not uncomfortable with long-term contracting authority. I don’t like it residing in a regulatory body, because I think that’s not good government.
The proposal I made last time, to which you were alluding and it’s the same proposal that I made this time is that we need to have a Maine Energy Finance Authority that can access low cost tax exemptions to capitalize everything I’ve just been talking about, but more importantly, moving natural gas into Maine’s communities.
Here’s the problem. It’s pretty straightforward and I think most of you know this. Pipeline companies will extend pipelines and CNG (compressed natural gas) companies will truck gas wherever there is an existing load that will pay back the cost of the investment over time – a short time, particularly for a publically held company. And in too many parts of Maine, where we have all the resources and access to resources that we otherwise need to spur development, we don’t have low-cost energy. And there’s not a sufficient load in place for a pipeline company to say, “OK, I’m going to extend the line.”
It’s often about just that much that needs to be added in terms of capital. But they make tough decisions and if you were an investor, you’d want them to make tough decisions. I think we ought to be in a position to make a public investment to bring gas into communities that need to be jumpstarted. Because once that happens we’re going to rebuild Maine’s economy faster. I think that’s a sound and essential public investment. I was for then and I’m for it now.
Dick Robertson, Farm Credit East: You’ve talked about transportation and energy. How about the tax burden for individuals and corporations? We’ve all read in the newspapers where companies have come up here and they don’t stay too long. There are things they don’t like and one of them is the tax burden.
Cutler: So I think it was about two weeks ago that I released a plan to lower property taxes for Maine residents by 20 to 40 percent. And – here’s the real distinction – I explained how we’ll pay for it. Maine’s tax structure has been variously described as archaic, inefficient, all the words you can come up with that are pejorative. And they’re right. Once upon a time, and in fact, I think, when I wrote the book, I said we need wholesale reform of Maine’s tax structure. I still believe that. Income tax, property tax, sales tax, state tax. I won’t touch the Tree Growth tax. But we need wholesale reform of Maine’s tax structure because it’s an impediment not only to the growth of Maine businesses, but to the decisions by new businesses to come here and start here. I don’t think, by the way, that it’s our biggest problem. I think our biggest problem remains the quality, age and skills of our work force. That’s the thing most folks look at as most important . . .
The governor has moved the tax burden from broad-based taxes at the state level to the towns and cities of Maine by getting rid of municipal revenue sharing and cutting aid to schools, so those towns and cities only have one option for raising money. One. Property tax. The other reason that I decided to go after just the property tax in the beginning was because I think if we can succeed in one big area of tax form – if we demonstrate that people will come together – then we’ll have momentum behind us. The wind will be at our backs to fix the rest of Maine’s tax structure. And fixing Maine’s property tax structure is the area I think I can get the most agreement among legislators because they’re hearing it from their constituents every single day.
Now besides explaining how I would pay for it, which is all on the web, and you’d pay for it by exporting the tax burden to tourists, the other big difference here is that I’ll be the first governor since Ken Curtis to take ownership of tax reform and to exercise leadership. You can’t get tax reform done, of any tax in any direction, in the State of Maine without leadership from the governor, without a governor who has the leadership and guts to take this on. And I do. And I can tell you right now that my two opponents don’t.