How do we get there ?
The cooperative model has helped citizens meet their needs for better jobs, healthy local food, affordable housing and other basic needs, and in the process built stronger, more resilient economies and communities. From the development of the cod fishery into one of Maine’s largest industries, to bringing electricity for the first time to millions of rural Americans, to the development of Maine’s developing reputation as the “food basket of New England”, cooperatives have brought people together and turned their shared needs into shared accomplishments, in ways that no other business was willing or able to do on its own.
In every case, committed individuals with a real stake in the outcome are central to success. However, another factor played a critical role in their success: a supportive ecosystem of public and private institutions, policies, incentives and finance. Other regions with much stronger cooperative sectors have seen impressive outcomes: stronger economies and communities, higher wages, more innovation and entrepreneurship, and lower levels of inequality.
If our goal is to create a prosperous, equitable economy where all Mainers can meet their needs and aspirations by 2030 – a time when today’s children will be seeking to make their own way in the world – then we need to learn from these examples and replicate the best of these ideas here in Maine.
Here are five goals and 12 strategies to improve our economy today and set the next generation up for success.
Goal 1: Make Cooperative and Employee Owned Businesses a Public Policy Priority
All politicians talk about strengthening the economy, supporting business development and creating jobs as one of their highest priorities. And most Maine foundations and philanthropists are dedicated to strengthening our families and communities and promoting an equitable, prosperous economy. So let’s focus our resources on a practical, proven, cost-effective strategy to accomplish those things.
Strategy 1.1: Our Governor and Legislature should direct state agencies dedicated to business, community and workforce development to review their programs and prioritize support for cooperative and employee owned enterprises.
Strategy 1.2: Foundations and philanthropists can help create the foundation of awareness, skills and policy upon which Maine people can build successful, sustainable cooperative and employee owned enterprises.
Goal 2: Encourage Business Owners to sell to a cooperative or ESOP
When they are ready to retire, business owners can secure their legacy, reward the loyalty of their employees or customers, support their communities, and have an easier time exiting their business by selling to their employees through a worker cooperative or ESOP, or to a consumer co-op organized by the community. Along the same lines, mobile home park owners or owners of rental properties can help their residents secure affordable homeownership by selling to a resident owned cooperative. Oftentimes, ownership conversions can lower transaction costs, along with numerous other benefits. Unfortunately, a lack of awareness of this option and how to pursue it means business owners frequently aren’t considering all their options. So let’s incentivize conversion to cooperative and employee ownership and make sure every business owner has access to information and assistance to pursue this option.
Strategy 2.1: Make the sale of any business, farm, or mobile home park or rental property exempt from capital gains taxation if sold to a cooperative formed by their workers, customers or residents.
Strategy 2.2: Establish a matching grant program for businesses to explore the feasibility of conversion.
Goal 3: Improve Access to Capital and Encourage Lenders to Lend
Cooperative and employee owned businesses face a number of unnecessary impediments in accessing capital from banks, credit unions and other lenders, and unfamiliarity with the model results in a perception of higher risk. So let’s remove the impediments and reward those financial institutions that are willing to lend on the fundamental strengths of the business.
Strategy 3.1: Invest a portion of our state’s deposits in Maine-based banks that have a commitment to lending to cooperative and employee owned businesses.
Strategy 3.2: Make interest income from loans to cooperative and employee owned businesses tax exempt for Maine-based lenders.
Goal 4: Improve Education, Information and Training
If we want more Mainers to have a chance to meaningfully participate in our economy, then we need to improve access to education, information and training on entrepreneurship and cooperative development.
Strategy 4.1: Support the development of a Maine Employee Ownership Center.
Strategy 4.2: Make entrepreneurship, innovation and cooperative development an integral part of experiential, project-based learning opportunities in every high school.
Strategy 4.3: Develop an accredited curriculum for cooperative development that can be used in Adult Education, Career Centers, colleges, and other adult learning programs throughout the state.
Strategy 4.4: Form a Maine Cooperative Business Association to advocate for and develop the sector.
Goal 5: Increase procurement of cooperative goods and services by institutions
Colleges, schools, hospitals, nursing homes, municipalities, state government and other Maine institutions spend millions of dollars each year on goods and services from local and out of state companies. If more of that money preferenced locally-owned businesses, we could increase market opportunities for and create more jobs within Maine’s businesses. This, in turn, would provide opportunities for producers and workers to form new cooperatives that can better meet the demand by providing stable markets and collaborative relationships between the institution and the cooperative.
Strategy 5.1: Review existing purchasing of locally-owned goods and services by institutions, municipalities and state government.
Strategy 5.2: Build partnerships among institutions, philanthropy, governments, local businesses, business developers, and co-op developers to convert existing business or start new co-ops that can supply products and services to institutions.