In his opening remarks June 5, Gov. Paul LePage began by telling the MFPC Board that “most of my career was in forestry and forest products,” and went on to talk about outline his concerns and areas where progress has been made. But the atmosphere was very relaxed and Gov. LePage got the audience laughing on a number of occasions. Below are excerpts of the comments, questions and answers from the hour-long meeting. They have been edited for length, continuity and clarity.
- Maine’s regulatory environment: We are really trying to put through what I call consistent and predictable regulatory reform. It’s been very, very difficult. For instance, two years ago we passed mining laws and the laws were on the books and we wrote the regulations. And they get vetoed every time. And unfortunately come January we’ve got to start all over again because they only put a two-year limit on it. They knew what they were doing. I mean it was planned.
- Democratic control of the House and Senate: It’s going to be very, very difficult if we win in November and we still have both Houses with the Democrats. I found out one thing – that it’s nearly impossible to move the ship when the ship is in mud. The first two years I think we had a pretty good run at it. We did a lot of good things. But we lost control in the Senate in 2012 . . . I’m a firm believer that you face the issues head on and you can’t be afraid of them. If you’re afraid of them and you play defense, then you’re going to lose the game. And I think we played defense in 2012 and we lost the game.
- Taxes: The income tax in the state of Maine and the fees in the state of Maine are abnormally high if Maine is going to become a competitive state with the southeast, southwest and mid-Atlantic states. We just need to clean up our act. Right now Wisconsin is moving fast, Indiana is moving fast, the Southeast is just kicking our butts.
- The Administrative Procedure Act allows the attorney general to veto anything that comes out of the Legislature and goes to the governor – before the governor even sees it. And what has happened this year and last year is all she (AG Janet Mills) needs to say is, “I believe it may be unconstitutional” and it kills it. It takes the governor out of it, the Executive Branch, and the Judicial Branch . . . So they bypass two branches of the three branches of the government. That’s a real problem.
- On forest products: For Maine to prosper, for the forest products to prosper and for the paper industry to prosper, we have to have a sustainable, working forest. To me, it’s all about the sustainability of the working forest. What the forest products industry needs relative to the economy, tourism, recreation – it’s all one. And I believe that we can achieve that because of the kind of people in this room and that we can move forward and get a real, sustainable forest.
- National park: I am not – I will say this right now –I’m not in favor of a national park or a national monument.
- Age of logging work force: “The average age is very, very high. We need to have a program that will entice young people to look at the trades. And I’ve tried to do that and both times the Legislature has shot me down. So now we’re going to try and do it through the executive branch, hire someone to go and talk to schools about trade opportunities. So we’re going down that path.
- Infrastructure: In the next two or three years – we’re going to spend this year and the following two years – we’re going to spend $2.2 billion on our infrastructure for transportation, rail, airports and ports. Things are starting on that right now.
- Investment: On Sunday I fly out of here, I go to Iceland to work with the government there and Einskip. We’re trying to get more investment into the state, particularly in Portland – a freezer plant for the fisheries — but by the same token trying to develop that business with them . . . Then I go to China and about a manufacturing plant and it’s going to involve enhancing our rail in order to do that. So that’s going to be very, very important.
- Finances: Today the rating agencies are coming out and I think that’s a pretty good sign – it’s a Aa2. Once we get to Aaa I will be satisfied that my job is done.”
Peter Triandafillou, Huber Resources: You touched on taxes and I really appreciate the work you’ve done. I’m interested in hearing what initiatives you’re thinking about in the second term to further increase the overall business climate and get new industries in here?
LePage: I talked to the chairman of Airbus and this is what he told me. I said, “You’re going to spend $600 million in Alabama. We’ve looked at your plan there and we’ll give you Brunswick landing. You might have to spend about $200 million because you need a couple more buildings, but we have the best runway on the east coast.
And he told me, “Governor, I’ll tell you this. I love your lobster and I’ll come up and have a lobster with you. But there are two things we need. One is we need competitive energy and we’re going to be getting our energy in Alabama for 4 cents – delivered.” And he said, “You are very naïve about the amount of energy it takes to put an A350 together.”
And he said, “The second thing is Alabama is right-to-work. If you fix those two things. If you fix those two, I’d spend $200 million to $250 million in Maine. But right now, the $600 million I’ll spend in Alabama I will make back in three years. “
So energy is going to be a big, big issue. And let me tell you what I believe about energy: All of the above. It’s an all-of-the-above approach. I not sure if you recognize it, but in 2011, 80 percent of residential homes in Maine were heated with oil. Today it’s 50. In three years. Without getting the Legislature involved.
We’ve got natural gas coming in. Natural gas is absolutely vital, that we get a pipe from Marcellus to Maine. Now I will say this whether it’s me or another governor, we’ve now convinced Massachusetts and Connecticut and Rhode Island to join. So we’re going to have the pipeline. We’re working towards a pipeline.
I put a bill in to the Legislature that said simply this: We will increase the annual cut on public lands to the annual growth and we’ll take the delta between our current cut and what we do and we’ll take that money and make it available for heating conversions for Maine people. And it went down. You’ve never heard it come out of committee, have you? It never got any debate.
That needs to happen. We need to be able to become an energy efficient state. We’re an energy exporter, but we’re not an energy efficient state. We’re very, very costly. So that’s one of the areas I want to go. This year the average energy cost went up 10 percent. It’s got to be going down – 15-20 percent a year for three years.
Steve Schley: Governor, you mentioned infrastructure and rail. In northern Maine, the state has a contract with a provider to manage the rail process up there on the tracks that the state now owns. Just as an anecdotal, experiential kind of comment, the facility that we’re associated with up there has gone from moving 45 to 60 cars a week to zero. Because the system just isn’t working.
LePage: The report we have is that the traffic is way up. So I don’t know if it’s one facility or not, but I will look into that. When I leave here I’ll make a call because that’s very, very important. If we’re going to move forward we need that rail and we also need the rail going to Montreal. So that’s very, very critical. And we do need to put infrastructure improvements into rail. I will say that I do know this, that there is a significant shortage of cars right now, both in the oil industry and in just regular freight cars in the northeast.
There’s a big push down in Laredo and that part of the country to transport automobiles from Mexico into the U.S. And so I know there’s a big pressure right now. There’s also a big pressure for getting cars for oil transportation. Because obviously what happened in Lac Megantic and other parts of the country. There have been several problems.
My trip to China deals with that. It is a manufacturer of rail cars that we’re trying to get to the U.S. And what we’re doing now is they’ve been working with the federal government for the last several months, trying to get their engineering approved by the FRA. If that’s done, then we have a good chance of getting some of that business. We hope. But I’ll make sure we address that because that’s very, very crucial for the future.
Tom Doyle: Governor, it sounds like you’re looking for changes to the Administrative Procedure Act and if you’re going to look at that, that whole process of review of major substantive rules is completely flawed.
LePage: I absolutely agree with you.
Doyle: Because what happens as you know is the executive branch and its commissioners and the Board of Environmental Protection in the case of the mining rules does its job and then it’s sent to the Legislature for major substantive review and they don’t even look at the rules. It’s strictly along party lines. They don’t pass them. So it’s a total problem with the separation of powers. Rather than changing the law, like they’re suppose to if they want to change the law, they just let it die. And then you have to veto it and then we’re in this impasse.
LePage: Believe me when I say to you that in the Administrative Procedure Act there are several parts that need to be modified. Simply to allow the ability of the administration to be a player. The way it’s happening, if you really look at what’s happening, I don’t know if you saw an article by George Will in the Washington Post, I think, or Wall Street Journal a few weeks ago. It dealt with the states that have had one party government for long periods of time. And they cite Illinois, they cite what’s happened in Illinois and a few other states, and it really mirrors what’s happened in Maine.
Over the last 50 years there have been two Republican governors. There’s been two years in which you’ve had the House, the Senate and a governor who were Republican in the last 50 years. That’s a real problem. The Legislature has been controlled essentially by one party, Democrats, for much of that time and enough so that they could maneuver a lot of what I think are unworkable laws, unworkable positions. Because they can use the rules and the statutes to overcome their bias or their point of view.
So there’s a lot of work that needs to be done. And I’ll be very frank with you. The Republicans came to power in 2011, November 2010. We hadn’t been in power, particularly the three houses together for a long time. And I tell my party – I told them at the convention – the thing about working with a Democrat is that you know the arrow is coming and you can duck it because you’re looking straight on. The problem with Republicans is it’s coming back here (he grins and gestures to his back, getting a big laugh from the audience).
So in 2012 the convention was an absolute disaster. The Ron Pauls and all that. We got caught in the middle of traditional Republicans and the Ron Pauls and Tea Parties and everybody and their brother was trying to fight for control. This time around, if any of you were at the convention or read about it, it was smooth as silk. We have got everybody on the same page. And we are working together.
Terry Walters: You’ve gotten a lot of criticism in the press about using your veto, but I want to thank you for doing that. I think if some of our legislators had done a better job you wouldn’t have had to invoke your veto.
LePage: That’s a very good point. I’m glad you brought that up because I did want to mention that. I vetoed 152 bills. That was less than 10 percent of the bills that came across my desk. Out of the bills that I vetoed, about half of them were sustained and the other half were overridden. Now, remember I said about the arrow coming this way? Sometimes coming this way? I only vetoed in my four years, three types of bills. And then before I veto them I will sit down with the Republican leadership and discuss why I’m vetoing them.
Number 1, I vetoed every single tax increase there was. I vetoed every fee increase that they tried to put in. And I’ll tell you why I did that. If you’re going to start a business in Maine – a retail business with sales of about $1 million a year – your permitting and your licensing is going to cost you around $80,000 in Maine. That is if you’re going to sell cigarettes and beer and wine – a convenience store. $80,000 a year. In New Hampshire it’s $22,000.
That’s why I veto fees, because what the Legislature will do is they’ll take it out of general funding and they’ll say, “You’ve got to find a source,” and so they develop these fees. They’re just taxes. So I will veto those.
I veto unfunded mandates. That’s another tax increase. So when it comes to those complaints, I’ll tell you the vetoes that I have made are of bad public policy.
Ron Lovaglio, forestry consultant: Governor, you were the proverbial Dutch boy with your finger in the dike on the guns for rangers bill and I appreciate that. It wasn’t a good bill to begin with and you were the last place it stopped. I wonder if you have any comment on it?
LePage: The way I see it is there are situations where law enforcement happens in the woods. And we all believe there is a few that should be armed. Where they’re falling apart and where we’re having the problem is dealing with forestry as a science. And so now we’re going to beef that up. . . . Because there are all kinds of trained firefighters, all of the state, and if you look at the history of firefighting in the state right now, it’s really going down. I mean the management is such that they’ve prevented a lot. That’s not saying we don’t need them. We do need a firefighting force but we also need a science force. With the budworm coming down we have to be doing a lot of work. So what we’re going to do is we’re looking to having law enforcement types that are going to do the investigating and that kind of stuff. And then we’re going to have firefighters and we’re going to have scientists . . . In the second LePage administration, we’ll see some changes in the Cabinet. But I’ve got to win before I can go anywhere.
Steve Schley: While you’re on the subject, I know that one of your opponents is making some fairly personal attacks against one of your other commissioners and I think she’s done a terrific job. Patti Aho. DEP seems to have come around and is more effective and I think it’s unfortunate the attacks she’s suffered.
LePage: Patti is very, very good … Patti can be tough, by the same token I think she’s very fair. And she’s really mentored a lot of the young scientists, the young environmental people in her department and I think we’re the better for it.
Jim Robbins Sr., Robbins Lumber: Can you comment on the efforts to get hydropower from Quebec?
LePage: Yes, what is happening right now is we are next in line and it all depends on the governor of New Hampshire, who just recently sort of backtracked. The Northern Pass has been working in New Hampshire for many years under John Lynch and when the new governor came in he said, “No way.” Which gave us an entry in. We started talking to them and she sort of got nervous when they heard we were going to do it and we have a straight right-of-way – we own it so it’s not like going through a lot of landowners – and so she’s sort of backtracking.
They’re starting to see now that our plan, we can get it done quicker, we can get it done more effectively and now we’re discussing Quebec hydro, New Brunswick and Maine . . . You’ve got to eliminate the 100-megawatt restriction on hydro . . . And the Democrats aren’t like Republicans. Democrats are told how to vote. When they caucus, they’re told how to vote and they vote in a block. Republicans, they think independently. And I don’t mind that. I think it’s good for government and good for policy. But they vote independently and that’s the killer.
Ron Lovaglio: Governor would you share your perspective on biomass power, coming from biomass plants in Maine, as well as wind?
LePage: OK. I’ll tell you about wind. The largest producer of wind in the country is Texas. And Rick Perry told me, “Governor, wind is tough. But it has one advantage. It’s better than solar.”
So from that perspective, I really believe the next 25 years in Maine that we’re going to need low-cost hydro and we’re going to need natural gas. Those are the two. And I say this because they’re baseline. You can do them in large, large quantities.
I think the state of Maine, the way it’s populated, that natural gas will not go through the whole state. And therefore you need to have alternatives. Some of the alternatives are pellets, both the bricks and the pellets, and then I also believe that biomass in commercial applications is the way to go. So to me it’s all of the above and the big issue is cost. It’s all about cost . . . In fact, in some parts of the state biomass is the way to go. We need to get the conversions done and we need to have the ability to get Efficiency Maine to look at it from a more residential point of view and if we can do that, then the commercial and residential will work very well in rural areas.
Joel Swanton, Forest Resources Association: The work force issues you’ve brought up are very important and we’re all committed to recruiting and helping find ways to train and getting people into the work force. Typically in logging, that’s got to be the bigger picture. But there is still a section of our state that’s very remote and despite our best efforts it’s very difficult to get U.S. workers to go to. Are you familiar with the Canadian logging situation? We’ve got some laws in this state that make that very, very difficult.
LePage: That’s coming to an end because the biggest proponent of that law will not be in government. I’m very much with you on that issue and I’ve spoken to some contractors up there. I’ll tell you the issue is not that Canadians are taking away jobs from Mainers. That is not the issue. We know that. That issue is only in the minds of maybe one or two people in the Legislature. But they happen to be in the wrong party and they have a lot of power. And we’re working at getting that out. Because you’re absolutely right. That is a big issue for us. And if you notice that whenever that comes up it doesn’t get a whole lot of attention from my desk.
Patrick Strauch: Well, governor we’ve made a lot of gains in the last four years, so we want to thank you for that. You’ve got a lot of supporters here.
LePage: I appreciate that and we look forward to making bigger gains in the next four years. Because I really believe we’re going to win. It’s just a matter of if we win with a House and Senate majority or do we win and I get more gray hairs dealing with the current leadership.