AUGUSTA, Maine — Business leaders collectively breathed a sigh of relief when the Legislature adjourned this month with the defeat of several measures they considered anti-business. But that relief is tempered by a fear of what will happen next session.
“We did really well,” said Chris Hall, vice president of the Greater Portland Chamber of Commerce. “We did well because I think there was a realization that we are in a very fragile economy and it could have been damaged badly by some of the proposals.”
But, he said, he is very worried about what will happen in the Legislature elected this fall because it’s expected the budget shortfall next year will be nearly as large as this year’s.
“People are talking about a billion-dollar shortfall,” he said. “That should worry everybody.”
Tony Payne, executive director of the Alliance for Maine’s Future, a business advocacy group, said business owners were relieved that the session ended without an increase in taxes on business. He said increased federal aid under the American Recovery and Reinvestment Act probably averted a tax increase, noting that mem-bers of the Legislature’s Taxation Committee looked at several options for new taxes or tax increases if they were needed in the budget process.
“The problem is that too many lawmakers look on business as having deep pockets they can go after,” he said. “But they don’t have deep pockets.”
Payne said he fears that when federal stimulus aid runs out, the new Legislature and governor will look to businesses for revenue to “fill the hole,” thereby making a bad situation worse.
“Every additional tax dollar is a dollar a business owner cannot invest and create jobs,” he said. “Some in Augusta understand this, but others do not.”
Jim McGregor of the Maine Merchants Association agreed. He said the effort among the business community this session was to stop adoption of bad policies and avoid tax increases to bail out the state budget.
“The problems were not solved long term, but I guess we are trying to give praise where praise is due,” he said. “Particularly the Labor Committee and some of the other committees deserve credit for recognizing the plight of retailers.”
McGregor and others said defeat of the sick leave bill, the minimum wage increase, the local option sales tax, and the licensing of home improvement contractors was important to the business community.
Dana Connors, president of the Maine Chamber of Commerce, said that overall it was a good session for the business community, even though he shares the worry about the next session.
“The Recovery Act money, the stimulus funds, sure did play a role in filling the budget hole this session,” he said. “The question is what happens next session, and there is reason to be concerned.”
Connors said the package of budget changes that lawmakers approved had a lot of “one-time” federal funds and that the new Legislature will have to consider further cuts in existing programs or tax increases, or likely a combination of both.
“The challenges facing the next governor and Legislature will, no doubt, be significant,” he said. “But we should not lose sight that the business community did well in this session.”
Connors said the business community will be watching the candidates for governor and for the Legislature to see what positions they take on issues of importance to business, including taxes and regulations, as well as perennial issues such as the minimum wage.
David Clough, Maine director of the National Federation of Independent Businesses, a small-business group, said while some are praising lawmakers for not harming the business climate, he and his members are upset that lawmakers did not address issues to help the economy grow.
“I didn’t really hear much focus about the 58,000 people that are unemployed,” he said. “There was not much focus on doing what could be done to help business create jobs for people and put them back to work.”
Clough said the only action to help create jobs will be from some bond issues, if they are approved by the voters. He said there are many regulatory and tax policies that could be changed to encourage companies large and small to invest and create jobs.
For example, he said, all Maine companies must keep two sets of books for depreciating new equipment. Federal law allows up to $250,000 in new equipment to be written off in its first year of use instead of spread over its useful life.
Maine allows only $25,000 to be written off in its first year.