Maine Trails, April-May '10
Inside Cover
President's Message
Cover Story
Bridging the gap
Portland’s Bayside Trail
Fast bridges
Worst Road in Maine
Great Recession
Flying colors
Selective catalytic reduction
Investing in Maine infrastructure


The great recession and beyond

USM economist Colgan takes MBTA members on a tour of life after economic downturn

Charles Colgan had the crowd from the very beginning. “I’m all for better transportation,” said the University of Southern Maine economist at the March 11 Cumberland County of the Maine Better Transportation Association in South Portland. The problem is, he said, “people don’t always realize you have to pay for it.”
Colgan’s talk was a command performance. He had spoken at the 2009 MBTA Cumberland County Meeting, right as the state and national economy were facing a long uphill climb out of the recession. At this year’s meeting, many MBTA members had returned to hear about the progress Maine is making in emerging from what he has dubbed “The Great Recession. . . and the deepest recession since World War II.”
The bottom line? Maine can expect to benefit from a 2-to-3 percent increase in the gross domestic product (GDP) for 2010. The outlook will continue to improve into early 2011, when the region’s economy will be “out of reverse but not into second” gear. He said by the final two quarters of 2011, Maine could be into “third and fourth gears.”
The relatively short turnaround – only 10 quarters to recovery compared to 20 quarters in the recession of 1990-91 – is “a significant victory for the Maine economy.”
Colgan talked about the “bubble economy” and its effect on key indicators, including GDP and investment trends. He also talked about the positive role of federal stimulus programs that had helped stop the downward trends, but which were not substantial enough to generate significant numbers of new jobs.
Maine’s “new economy,” according to Colgan, will see new jobs primarily coming from the education and health sectors (11,700 new jobs), leisure and hospitality (6,940) and professional and business sectors (6,450) by the fourth quarter of 2013. Growth in retail (3,400), manufacturing (3,300), government (2,950 ) and construction jobs (2,190) will be more modest.
Colgan said traffic on the Maine Turnpike, a bellwether of the state’s economy, is expected to increase by 3.7 percent in 2011.
Then the economist turned his attention to opportunities for Maine in the new economy. He said Maine will face challenges in key sectors – all affected by transportation: energy, climate, information and livability-mobility.
 “Transportation has a major role to play in all of this,” Colgan said. Energy will continue to be a major hurdle, because currently more than 60 percent of the state’s energy is expended for transportation. That will become more problematic as energy prices trend upward and the nation and the state shifts to alternative fuels, placing pressures on the funding of transportation maintenance and improvements.
Climate will be a concern, as the state begins to experience the effects of global warming. “Warmer and wetter weather” will increase transportation maintenance costs. Finally, the state will have to address mobility and livability issues in its most densely populated regions by integrating land use and transportation planning.
Traditional industries including forest products, agriculture, marine technology and aquaculture will continue to be economic mainstays. The state will need to foster growth in key industries to fully realize its potential in the new economy – composites and new materials, information technology and biotechnology.
Ultimately, to meet these challenges, Colgan said, Maine will need to invent new models for pricing roads that are not based on the gas tax. “Some are going to be more unpopular than others, but that will not overcome the necessity. The existing funding model is unsustainable.”
Even before Colgan began his tale of economic recovery, the mood in the room was decidedly upbeat. More than 120 MBTA members and friends were in attendance, and MBTA President Tom Martin presided over a program that included John Duncan’s presentation of a new transportation video produced by the Portland Area Comprehensive Transportation System (PACTS), Colgan’s speech and the announcement of the 50/50 Raffle. Tim Folster’s name was drawn from the entries, and he won $294 while an equal share went to support MBTA Educational Foundation’s Scholarship Fund.


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