Hard Times Put the Shiver in a Bitter Maine Winter : Economy: State has plunged from prosperity to poverty. Old-timers compare it to Great Depression.

Somewhere in the dark forests, or perhaps out beyond the whitecapped bays, winter waits, growling in the night, and Maine, vulnerable and apprehensive in this season of discontent, is hunkering down.

With trees stripped bare of leaves and the smell of wood smoke in the frosty air, the monied summer colony has boarded up its coastal homes and headed south. Old oil drums block the driveways of shuttered motels and restaurants on the two-lane approach to Bar Harbor, and over in Cherryfield, Carlton Willey has picked the last of his blueberries, stacked his firewood and marked the Christmas trees he and his son will cut to help make ends meet.

“It used to be that what you earned in the summer carried you through the winter, when there was no work,” said Willey, 60, a pitcher for the Milwaukee Braves and New York Mets of a generation or so ago. “But this year there wasn’t a lot of summer work and with more people getting laid off now, you know Maine’s going to have one tough winter.”

Not since the Great Depression, people say, have conditions been as desperate as they are now in Maine, the poorest of the New England states and the most sparsely populated state east of the Mississippi. In less than three years, Maine has lost 40,000 jobs, cut its budget three times and seen its personal income growth fall to dead last in the rankings of the 50 states. The result is an economic free fall challenging Maine’s lifestyle, which attracts and holds people who by choice would live no where else.

H. L. Mencken wrote in 1925 that “Maine is as dead, intellectually, as Abyssinia. Nothing is ever heard from it.” That comment would find its critics today, but Maine--despite its community of writers and artists and its respected public and private institutions of higher learning--does remain an anachronism amid the sprawl of troubled northeast cities.

Eighty percent of the state is covered by forests and its ethnic composition is 99% white. The median cost of a house is $37,900, the median monthly rent, $173. Sixty-three percent of the households are occupied by married couples (compared to 34% in Los Angeles). Only three states--Delaware, South Dakota and West Virginia--have fewer resident millionaires per capita. Only one state, North Dakota, has a lower homicide rate.

“The difference for me between living in Los Angeles or Sacramento or Houston and living here is the concept of community,” said Dick Cattelle, a real estate agent who moved to Maine in 1976 after a career with McDonnell Douglas’ manned space program. “In a place like Los Angeles, sure, I had a life, a profession. Other than that, you’re just kind of there. In a place like Bangor, you have people believing that communities operate well as a function of those who participate in their operation.”

Ironically the very characteristics that now threaten Maine--slow economic development and a small, rural population (the state’s population reached 600,000 in 1860, then took 130 years to double)--are the same ones that traditionally enabled it to preserve its compelling lifestyle and isolated beauty.

But with Maine’s potato industry having lost its leadership to Idaho and other producers, with defense contracts down and military bases closing, with the slumping timber industry cutting back jobs because of high-tech advancements, and with virtually no new businesses relocating into the state, the taciturn, dry-witted and frugal “Downeast Yankees” of Maine are concerned.

Along the Narraguagus River, in the library of the former schoolhouse that now serves as Cherryfield’s town hall, Virginia Grant, a volunteer librarian, said her little Washington County community used to be an important ship-building and timber center. “Now,” she added, “it’s mostly just our two blueberry factories that keep us going. Wouldn’t you say that’s right, Buddy?”

Buddy Parker, a retired fisherman, was perusing the paperback books in the war section and did not answer.

“So we’ve got many people on welfare now, more than I can ever remember, and we’ll probably see a lot more before the winter’s out. Am I right on that, Buddy?”

“You hit the nail on the head,” he said, settling on “The Story of Wake Island.”

“Of course, people also get money digging clams down on the flats, but I don’t think all the flats have clams, do they, Buddy?”

“Some do, some don’t,” Buddy said.

Then he offered: “They say Washington’s the poorest county in Maine but you got to remember some of these women in the factory, they don’t plan to work the winters. They figure on going unemployed come December. That’s just a way of life here.”

“That’s exactly how it is,” Virginia Grant said.

The economic downturn represents a sharp reversal of fortunes for Maine. In the final stages of the booming 1980s, Gov. John R. McKernan Jr., a Republican with an admirable environmental record, distributed a $61-million surplus to taxpayers as a rebate. Maine was voted the State of the Year in 1989 by the National Alliance of Business. Young professionals poured out of New York City and Boston to take up residency in Portland. And southern Maine proudly boasted that it had “zero unemployment.”

“I felt like a barker on Bourbon Street in New Orleans, yelling, ‘Jobs. I got jobs. Step right up and get your jobs,’ ” said Gary Whitney, the Bureau of Employment Security director for the Portland area. “I had 1,500 job vacancies and I couldn’t fill them. Dishwashers were demanding and getting $6 and $7 an hour.”

But no sooner had McKernan been reelected, in 1990, after being chided by his opponent for being too optimistic about the economic future, than Maine rode New England’s coattails into recession.

In a budget battle with the Democratic-controlled Legislature last summer, McKernan declared a civil emergency that shut down government services except for health and safety operations. It was the height of the tourist season and there wasn’t a state park or state liquor store open from Madawaska on the Canadian border to Kittery on the Massachusetts line.

The two-year, $3.2-billion budget was finally balanced with deep cuts in everything from education to mental-health services. State workers agreed to take off 20 unpaid days during the life of the budget. McKernan hung a sign in his office that read, “We Did It!”

Maine thought the worst was over. Then, last month, McKernan shocked his constituents by announcing that the state faced an unexpected $125-million shortfall in revenue. The budget slicing started anew.

“Let me show you something,” McKernan, 43, recently said to a visitor in his Augusta office. He balanced a large chart on his knee. “This is where we were with jobs before the election and this is where the forecasts said we were going.” His finger followed a fairly level line. “And this is what happened,” he said, turning a plastic overlay whose downward slant represented the unanticipated loss of 16,000 jobs.

McKernan went on: “People are frightened and rightfully so. The reason there’s so much confusion is because people are losing jobs they never thought they’d lose. They know these companies are trying to figure out how to live with lower costs so they can compete in a global economy and they know a lot of those jobs aren’t going to be there when we pull out of the recession.”

Across the state, professionals by the hundreds have become handymen, welfare rolls and pessimism are growing, and in some inland areas the cash economy is reverting to a barter economy, with, say, dentists and woodsmen swapping products--a root canal for a couple of cords of winter firewood.

When John Laban’s job was abolished a year ago as development manager of a $7-million expansion at the Bethel Inn & Country Club--a cash-strapped bank had called in the inn’s loan early, killing the project--the family’s cash flow slowed to a trickle, but no one came knocking at his door to collect overdue bills.

“The dentist, the guy who delivers my hay, the car mechanic, they all knew what had happened. They’d say, ‘Can you pay a few dollars a month?’ or ‘Don’t worry about paying anything till you get back to work,’ ” said Laban, 50, a professional forester and former Air Force B-52 pilot from Massachusetts. On his lawn stands a 1938 John Deere tractor, in perfect running order, with a hand-lettered for-sale sign ($1,800).

“In times like these,” he continued, “you get back to the basics in the country. Friends and neighbors help you. They give you a cushion, and that makes quite a difference. It’s why I’d never leave this place. I just couldn’t do it.”

“What’s frightening,” said his wife, Suzanne, whose hand-spun skeins of wool from their 70 sheep provides the income that has become the margin of survival, “is that for the first time we don’t have a plan. You live day to day, hoping things will turn around. There’s no safety net.”

Like many people in rural New England, the Labans have come to understand they will soon be paying more taxes for less state services. And they know, too, that budget paring and government handouts alone can not fix what’s wrong with the economy because, as U.S. Sen. George J. Mitchell (D-Me.) said recently, “The best social program is a good job.”