Testimony of Nancy Smith, Executive Director of GrowSmart Maine
Support for LD 1827,
“An Act To Authorize a General Fund Bond Issue To Support Maine Small Business and Job Creation”
March 27, 2014
Senator Hill, Senator Valentino, Rep Rotundo, Rep Berry, and honorable members of both the Committee on Appropriations and Financial Affairs and the Joint Select Committee on Maine’s Workforce and Economic Future; my name is Nancy Smith. I live in Monmouth, and am the Executive Director of GrowSmart Maine.
I am speaking in favor of LD 1827 and will also be raising concerns about portions of the proposal, based on my eight years of service on the Joint Standing Committee on Business, Research and Economic Development, six years as its House Chairman.
Within the Bond Language as proposed in Part A of the bill: GrowSmart Maine supports Item 2, recapitalizing the Regional Economic Development Revolving Loan Program, a successful, statewide program which provides revolving loan funds to Maine small businesses. This proposal also expands the REDRLP to allow for additional uses that fit well in the overall program. This proposal provides for rural and downtown revitalization through support of the natural resource sector and mixed use commercial/residential developments.
During public testimony, Bill Norbert of FAME spoke of the 16:1 leverage achieved by the REDRLP program. In addition, Geoff Gattis of Bath Savings and Carla Dickstein of CEI spoke to on the impact they have seen in business across the state. I will add that the program has had real impact in jobs, with the creation and retention of 10,509 jobs (6,071 created and 4,438 retained). GrowSmart Maine strongly supports this proposal as a public investment in sound economic growth for Maine.
Regarding the portions of the proposal which would fund investment in innovation, I support item 3 of the proposed bond issue which creates a competitive bond fund within MTI. You have heard from the experts, highly regarded in the world of innovation: John Burns with the Maine Venture Fund, Jake Ward of UMaine and Cathy Renault, formerly the head of the DECD Office of Innovation. There has also been mention of the Science and Technology Plan, most recently presented to the BRED committee by the Office of Innovation in 2010 – it is one of the best tools Maine has to strengthen our economy in a way that builds on our unique assets. I still have my copy of the report and we referenced it in our 2012 update to the Brookings Report, Charting Maine’s Future; Making Headway. Finally, I want to emphasize the incredible success Maine Technology Institute has achieved in their work to promote innovation in Maine.
However, I offer a caution, in recognition of the great value of the competitive process in innovation investments over specific earmarks. This evolution was implemented midway through my legislative tenure, based in sound best practices that still make sense today. MTI is successful in implementing such a competitive process and I therefore have concern over parts 5 and 6. With this caution, I do not intend disrespect for the entities receiving earmarks in the bond proposal. They will do very well in a competitive process, which ensures the best investments for Maine’s future are funded. Desired outcomes are very clear; innovation that leads to commercialization which in turn leads directly to market success, economic growth and jobs. This can be done without diluting the impact by too broadly spreading out the available investments but by focusing on the best proposals.
The DECD portion of the bond, Part 7, concerns me due to reduced vigor in the Office of Innovation within DECD and the redundancy created when MTI is so effective in implementing grant awards. I would ask you to consider if there is the necessary expertise and focus to manage such a bond fund and measure the outcomes of these investments within DECD. The Marine sector is one of Maine’s successes and should be supported, however this fund should be housed in MTI.
In closing, GrowSmart Maine supports a smart economic development bond package. This calls for substantial investments in MTI and the REDRLP. Upon hearing that the Maine Venture Fund was once a part of this proposal but has been removed, I support inclusion of this successful program as well. The Maine Venture Fund provides a public stake which, coupled with such private sector endeavors as the Maine Angels, gives Maine entrepreneurs the support to grow their start-up businesses here in Maine. I encourage you to remember the remarks of Charlie Colgan in his testimony to the committee; low interest rates are still at hand, a bond will support Maine’s small businesses at a time of five consecutive quarters of economic growth. Those sitting on the sidelines are ready to get back into the game and we need provide the capital needed so the best can move forward. This proposal is well-timed for Maine.