State
Survey: Maine Cost of Living Great than National Average
By MHPC
Sep 28, 2006 - 11:17:00 PM

PORTLAND -- The Maine Heritage Policy Center today released a new report titled, "The Cost of Living in Maine," authored by J. Scott Moody. The analysis examined the second quarter results of the ACCRA Cost of Living Index© (ACCRA-COLI), focusing on how the Portland and the Bangor metro areas compared to the other participating cities in the nation.

Key findings in the report reveal that the cost of living in the Portland and the Bangor metro areas, which contain 52 percent of Maine's population, are greater than the national average. Portland was 16.1 percent greater than the national average, while Bangor was one percent greater than the national average. The high cost of living results primarily from two things: high housing costs and high utilities costs.

Additionally, Mr. Moody found a strong correlation between high tax states and areas with a high cost of living.

"Maine is not as affordable of a place to live as people once believed," said Scott Moody, vice president of policy and chief economist for The Maine Heritage Policy Center. "This analysis reveals that Mainers living in the Portland and Bangor metro areas have a higher cost of living than the national average."

"Analysis reveals that there is a strong correlation between high tax states and high cost of living," sated Mr. Moody. "Policymakers must recognize that the level of taxation imposed on citizens gets passed through in the cost of living."

For the second quarter of 2006, 222 metropolitan areas participated in the survey. In Maine, data was collected for the Portland and the Bangor metro areas. The ACCRA-COLI© is derived from 6 major categories: grocery items, housing, utilities, transportation, health care, and miscellaneous goods and services.

Key findings include:

• Standing at 16.1 percent above the national average, Portland has a high cost of living. It ranks 32nd highest out of the 222 metropolitan areas. The categories most responsible for Portland's high ranking are housing (rank 29th, 38.2 percent above the national average) and utilities (rank 13th, 25.4 percent above the national average).
• Standing at 1 percent above the national average, Bangor's cost of living is just above the national average. It ranks 68th highest out of the 222 metropolitan areas. The category most responsible for boosting Bangor over the national average is utilities (rank 3rd, 32.6 percent above the national average).
• Among Portland's 22 peer cities in the survey (+/- 25 percent of Portland's population), Portland has the highest cost of living. Again, the primary culprits are housing (rank number 1) and utilities (rank number 1).
• Among Bangor's 58 peer cities in the survey (+/- 25 percent of Bangor's population), Bangor has the 10th highest cost of living. Again, the primary culprit is utilities (rank number 2).
• Although a small and biased sample of New England cities in the study limits its usefulness for making New England comparisons, analysis indicates that Portland and Bangor are among the lowest cost of living cities in the region.
• Maine's high state and local tax burden contributes to Portland's and Bangor's higher than average cost of living.

The ACCRA-COLI© made its debut in the first quarter of 1968 and has been published on a quarterly basis for every year since. The index is designed to answer a specific question: "How do urban areas compare in the cost of maintaining a standard of living appropriate for moderately affluent professional and managerial households?" In other words, the index is geared toward a specific type of household based on the following characteristics: A two-income household with one child, both spouses hold a college degree, and household income is in the top 20 percent for the given area.

The data gathered for the index is performed on a voluntary basis by chambers of commerce, economic development organizations, and other similar institutions. Participation has grown steadily and now regularly exceeds 300 metro areas. As of 1999, the ACCRA-COLI© represented more than 70 percent of the urban U.S. population, including more than 80 percent of the population in the 50 largest metropolitan areas.

• Full text of "The Cost of Living in Maine"

Moody's report is available online at www.mainepolicy.org. The ACCRA-COLI© is available online at www.COLI.org.