Augusta: Economy

Major Industries and Commercial Activity

As the capitol of Maine and seat of state government, Augusta is Maine's largest location for government employment; state government employs several thousand Augustans. Governmental activities are supported by financial institutions, law firms, and economic and governmental liaison consultants. Health care institutions in the region also account for a large share of service sector employment, especially MaineGeneral Medical Center, which employs 1,738 at its campuses in Augusta and nearby Waterville. Augusta is the site of a number of private sector employers with significant bases in the city, such as Central Maine Power Company, an electric utility that serves more than 560,000 customers throughout the state; and SCI Systems, which produces computer peripheral equipment. However, manufacturing employment in the area decreased during the late 1990s and into the 2000s. From 2000 through 2003, the state of Maine saw 11,430 layoffs at 163 manufacturing facilities; 1,139 of these layoffs were at Augusta-based companies. But there are new high-tech jobs emerging. Microdyne, a technology services company, has a technical support and helpdesk service center in Augusta. Augusta, like the rest of Maine, has fiber optic cable in many phone lines. This allows greater carrying capacity and is attractive to firms that demand easy linkage with other offices.

Augusta's central location has made it a major regional distribution center. Significant warehousing/distribution activity is evident within the commercial base of the community. Augusta is situated near several popular vacation areas, and tourism is another significant source of revenue.

In addition, Augusta has always been one of the state's retail hubs. In recent years, retail sales in the city have increased more than in the state as a whole during the same period. In 2001, consumer retail sales were $750,000 million, a 100 percent increase from 1991. Among all cities in Maine, Augusta is second only to Portland and Bangor in retail sales.

Items and goods produced: wood and paper products, computers, textiles, shoes, and meat processing

Incentive Programs—New and Existing Companies

Local programs

To encourage business investment in Augusta, the city offers an array of incentives, including: tax increment financing for qualified projects; loans of up to $25,000 for Augusta companies moving to another location within the city; and loans or grants of up to $400,000 to finance fixed assets, and/or up to $200,000 in gap financing for up to 40 percent of a business' development activities, for projects that benefit a percentage of low- to mid-income persons.

State programs

The Finance Authority of Maine (FAME,) assists economic development by providing capital for businesses through a wide variety of programs. FAME offers direct loans; credit enhancement through risk reduction and rate reduction programs; equity capital assistance for early-stage businesses; and cooperative programs with local agencies. Maine's Office of Business Development provides comprehensive financial, management, production, marketing, and other technical assistance to Maine businesses.

Job training programs

The Maine Quality Centers Program, coordinated by the state's technical colleges, offers customized education and training for new or expanding businesses at no cost to the businesses or to the trainees. The Capital Area Regional Vocational Center, part of the public school system, offers high school students and adults training in a variety of occupations. Special courses can be designed to meet the individual needs of employers. The Governor's Training Initiative program develops and coordinates training for companies that intend to expand or locate in Maine, reorganize to remain competitive, or upgrade worker skills.

Development Projects

In recent years considerable attention has been focused on Augusta's downtown, especially its waterfront area. A state-city partnership called the Capital Riverfront Improvement District (CRID) was established in 1999 to increase access to and use of the Kennebec River and revitalize the city's downtown. One of CRID's major current projects is the rehabilitation of the former site of Edwards Mill—a textile mill that closed in 1983 and then burned down in 1989—as an urban park. In 2004 the state granted $330,000 for the first phase of this project; CRID is currently seeking additional funds. A $500,000 restoration of the Kennebec Arsenal—a former army barracks and munitions supply house—to its original 1830 look is scheduled to begin in the summer of 2005. CRID's master plan for the city's downtown, developed by the people of Augusta and supported by state and city government, envisions a revitalized recreational waterfront, paths and parks linking the area's features and amenities, and development of the urban park. Private investment has led to revitalization of downtown's business core through the rehabilitation of landmark buildings, such as Old City Hall, the historic former home of city government, now an assisted living residence for seniors.

In 2005 an expansion of the Marketplace at Augusta shopping center began that will expand its floor space from 750,000 square feet to 960,000 square feet. A new, $55 million shopping center called Augusta Crossing is slated to open in 2006, potentially creating 850 new jobs.

Economic Development Information: Office of Economic and Community Development, City Center Plaza, 16 Cony Street, Augusta, ME 04330; telephone (207)626-2336. Finance Authority of Maine (FAME), 5 Community Drive, PO Box 949, Augusta, ME 04332; telephone (207)623-3263

Labor Force and Employment Outlook

Because government is the major employer in Augusta, the area has a relatively stable workforce and the unemployment rate is lower than many other areas in the state. Since a significant number of low-skilled manufacturing jobs have left the area over the last two decades, Augusta citizens have had to attain more education in order to secure jobs. The number of adults with high school diplomas continues to increase in Augusta, rising from 65.6 percent in 1980, to 74.4 percent in 1990, and then 80.4 percent in 2000; the percentage of Bachelor degree holders was 15.1 percent in 1980, then 16.3 percent in 1990, jumping to 24.4 percent in 2000.

The following is a summary of data regarding the Kennebec County, Maine labor force, 2004 annual averages.

Size of nonagricultural labor force: 78,246

Number of workers employed in . . .

construction and mining: 4,663

manufacturing: 3,760

trade, transportation and warehousing, and utilities: 15,818

information: 1,005

financial activities: 1,931

educational and health services: 14,329

government: 16,278

Average hourly earnings of production workers employed in manufacturing: $16.97 (statewide average)

Unemployment rate: 4.8% (2004; Kennebec County)

Augusta: Economy

Largest employers Number of employees
Central Maine Power Company more than 1,000
MaineGeneral Medical Center more than 1,000
SCI Systems, Inc. 500-999
Shop 'n' Save 250-499
O'Connor GMC Buick 250-499
Pine State Vending Company 250-499
Microdyne 250-499
Augusta Mental Health Institute 250-499

Cost of Living

The price of housing in Augusta is quite reasonable, and the average house sale price is usually considerably less than the average sale price in the state of Maine as a whole.

The following is a summary of data regarding cost of living factors in the Augusta area.

2004 ACCRA Average House Price: Not reported

2004 ACCRA Cost of Living Index: Not reported

State income tax rate: a graduated income tax rate from 2.0% to 8.5% of federal adjusted gross income minus all modifications, exemptions, and deductions.

State sales tax rate: 5.0%

Local income tax rate: None

Local sales tax rate: None

Property tax rate: $26.00 per $1,000 (2005)

Economic Information: Kennebec Valley Chamber of Commerce, PO Box 676, Augusta, ME 04332-0676; telephone (207)623-4559; fax (207)626-9342. Maine Dept. of Labor, Div. of Economic Analysis and Research, 20 Union St., Augusta, ME 04330-6826; telephone (207)287-2271