April 20, 2018
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State job creation increased, conservative group reports

By Dylan Riley, Special to the BDN

BREWER, Maine — Three new reports released Thursday by the Maine Heritage Policy Center, a conservative think tank based in Portland, show Maine’s level of job creation has consistently increased over 15 years since 1993, but its growth is the 10th worst in the country.

The reports analyze data from the National Establishment Time-Series — or NETS — database, which is based on data from more than 36.5 million businesses collected between 1989 and 2007.

The reports conclude that the birth of new businesses is the biggest driver of job growth in Maine and that they accounted for an average 35,000 new jobs per year between 1993 and 2001. After 2002, new businesses accounted for an average 22,000 new jobs per year.

The reports are part of a study by the policy center intended to get “real-world data” to policymakers, who too often create economic policy based on “gut reactions,” according to Chris Cinquemani, the center’s spokesman.

Scott Moody, the center’s chief economist, spoke to the press Thursday about the reports. He said two solutions for increasing job growth in Maine are to allow the deduction of business equipment purchases for income tax purposes and to tailor tax policies to weigh less heavily on new businesses to decrease the burden of starting up.

The reports rank Maine 30th in the nation in terms of job growth from new businesses and find the state had a 0.4 percent decrease in that work force between 1989 and 2007.

In terms of overall employment, Maine saw a 21 percent growth between 1989 and 2001. However, employment peaked in 2001, and it’s been falling ever since, according to the reports.

The reports don’t examine specifics such as the value of green jobs or which types of businesses Maine should try to attract, but future studies will include such information, according to Moody.

When asked about economic policy, Moody gave tax increment financing as one example that can help expanding businesses although it doesn’t assist new businesses starting up.

State Sen. Elizabeth Schneider, D-Orono, said the Legislature does try to create incentives for businesses to start up or migrate to Maine and cited last year’s Pine Tree Development Zone expansion as one example.

“It’s like a bucket of various tax incentives that [businesses] can qualify for depending on their particular situation,” Schneider said. “We’ve done a lot of things in Maine over the course of my time in the Legislature to try to spur economic development.”

Schneider is Senate chairwoman of the Legislature’s Business, Research and Economic Development Committee. She said people don’t often acknowledge the tax policies the Legislature creates to assist business in Maine.

When asked about tax policies such as those Moody suggested, Schneider said the Legislature has already made newly purchased business equipment tax-exempt thanks to LD 2056, passed in 2006.

“Maine is very fiscally responsible and I don’t hear that being reiterated,” Schneider said. “A lot of the mantra about Maine being not friendly [toward business] is a mantra that’s being done for political gain instead of what’s good for Maine.”

She acknowledged that one area where Maine can improve is permitting and licensing — a process she described as cumbersome, but an aspect of state government that is possible to improve.

The policy center’s three reports were started in May, and the center expects to publish more in the future. Cinquemani said the center’s focus doesn’t directly tie in with the gubernatorial campaign, but he does encourage candidates to read the reports.

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