By Christian McNeil, economist
While Plum Creek touts the presumed economic benefits of its development proposal in the Moosehead Lake region, which will soon be subject to public comment, it’s worth noting that some of the most controversial elements of the plan contribute little, and in some cases detract from, its net economic benefits.
Dr. Charles Colgan of the Muskie School for Public Policy has forecast the economic benefits of three sectors of the proposed development: industrial forestry, tourism, and construction.
Plum Creek has publicized those projections widely, but without much context to the numbers. A close reading of the report actually reveals that the most controversial aspects of Plum Creek’s proposal — the 975 house lots sprawling to the far reaches of the state’s largest lake — would contribute very little to the region’s economy, compared to the economic impacts of traditional forestry and back-country recreation.
The Colgan report affirms a frequent finding of natural resource economics: that forests open to forestry, hunting, wildlife and back-country recreation are much more valuable than house lots.
There is little doubt that the Moosehead region earnestly needs new workforce housing and jobs, as well as a comprehensive plan for tourist and forestry development.
Plum Creek’s proposal comes close to fulfilling those needs. But if Moosehead communities had been allowed to craft their own vision for the region, it would probably differ considerably from Plum Creek’s for-profit proposal.
Some of the most controversial aspects of the plan — the dozens of house lots on the remote northern shores of Moosehead and Brassua lakes, for example — would only create short-term construction jobs and comparatively little personal income for local communities.
According to Colgan’s economic analysis of the plan, construction income would mostly accrue to workers living outside of the Moosehead region and diminish rapidly after peaking at $16 million in 2015.
By comparison, personal income from just one proposed sawmill is forecast to grow to $35 million annually by 2030.
In exchange for relatively paltry and short-lived economic benefits, those new house lots on remote lakes will require huge new expenditures in road maintenance and public safety.
While their taxes will go to the state, local municipalities will be expected to pay the costs of most public services.
If families should move into some of those homes — and the Eastern Maine Development Corporation predicts that as many as 340 families might — local municipalities will also have to bear exorbitant costs of transporting children from the former wilderness to schools in Rockwood, Greenville and Jackman.
To make matters worse, the state will contribute less and less money for local schools as the new development increases regional tax valuations.
House lots will also exact substantial opportunity costs as they put hundreds of acres of productive forest off-limits to traditional uses and industrial forestry.
It’s worth remembering that this is the second edition of a development scheme first hatched in 2004. After widespread outcry, Plum Creek acknowledged that its first plan introduced too much sprawling development to the region, and it introduced the current “compromise” proposal.
Critics lament the fact that this second version of the plan has the same number of house lots, most of which are located in the same remote reaches of the Moosehead region. The biggest difference may be a much more coordinated public relations campaign, one that heralds the plan’s development spending as a boon to a struggling regional economy and enlists the tacit approval of major recreational groups like the Appalachian Mountain Club, which would be a beneficiary of the plan’s “Conservation Framework.”>/p>
Strong opposition remains nevertheless, and the recent news that Plum Creek will exploit a legal loophole to develop Oregon’s coastal forests without regard for local land-use laws won’t bolster public faith in the company.
If Plum Creek amended its plan once, it can easily do so again. By removing remote house lots from the concept plan, Plum Creek can demonstrate its commitment to the long-term vitality of the Moosehead region.