Business leaders to LePage: Taxes, regulations hurting business

Posted Jan. 27, 2011, at 7:16 a.m.
Last modified Jan. 27, 2011, at 12:47 p.m.

PARIS, Maine — Local business owners and managers aired their grievances Wednesday on the state’s taxes and building regulations.

The Red Tape Removal Audit Meeting was one of many around the state, fulfilling a campaign pledge from Gov. Paul LePage to help lift some of the red tape businesspeople say hinders them.

Mark Ouellette, director of the state’s Office of Business Development, was in attendance to collect information for the governor.

State Rep. Jim Hamper, R-Oxford, and state Sen. Dave Hastings, R-Fryeburg, were also there, as were Diane Jackson representing U.S. Sen. Olympia Snowe and Carlene Tremblay for U.S. Sen. Susan Collins.

The main themes of the gripes were Maine’s sales taxes, which several said were too complicated, and the high prices of paying for employees’ health insurance. At the same time, there was obvious excitement at LePage’s pledge to ease regulations.

“I really hope you have the courage to see this through,” Matt Hancock, co-owner of Mt. Abram ski area in Greenwood, told the panel. “We definitely need the change.”

Hancock called for a single state agency to handle all business permits with a streamlined system for approving them.

“We have eating occupancy permits, health inspection permits, lift permits, dance floor permits, drinking water fee permits, permits for road signs,” and others, he said. “In our 15-week business, it’s almost impossible to keep up with (it).”

He also called for a cap on state fees to prevent businesses from being “taxed to death.”

“There has to be a cap that says, ‘If our business has an earning capacity of X, you can’t go over Y.’”

Jinger Duryea, president of C.N. Brown and the host of the forum, handed out a sheet detailing what it cost her company to open a new store in New Hampshire versus in Maine. Sales tax on building materials, underground gas tanks and computers is nearly $26,000 in Maine, by her estimates, plus $1,500 for the exact GPS location of underground gas tanks, a Maine Department of Environmental Protection requirement.

Maine requires more expensive gas nozzles, as well.

Duryea also criticized a law requiring gas stations to replace their underground gas tanks when the warranty runs out, despite the fact the tanks are double-lined with leak monitoring systems.

“It costs a lot of money in our industry to replace underground storage tanks,” she said, nearly $300,000. In Canton recently, they considered shutting down a store rather than replacing the tank, Duryea said.

Steve Roderick, who runs Amato’s pizza and sandwich shop on Fair Street in Norway, criticized the state’s complicated sales tax structure. An apple sold at Hannaford has no sales tax, he said, while one sold at a restaurant has 7 percent sales tax, unless, as is the case with his shop, they make less than 75 percent of total sales in prepared foods. Sales tax is 5 percent for an apple at his store, he said.

He said special tax exemptions and tax rates he’s required to follow, under penalty of fines for noncompliance, are hard to understand.

“I have five different tax buttons on my cash register,” Roderick said. “I don’t have a lot of rocket scientists working for me, so I could be breaking the law several times a day.”

He called for a consistent sales tax rate for everyone.

Another common theme was the idea that environmental regulations and business development aren’t mutually exclusive.

Scott Vlaun, co-founder of Moose Pond Arts and Ecology and an organic farmer, said Maine’s ecosystems “have monetary value in the services they provide.”

“A lot of people see protection of the environment as a hindrance,” he said. He said the Western Foothills Land Trust is exploring the idea of payment for ecosystem services. The Crooked River, he said, eventually flows into Sebago Lake and becomes Portland’s drinking water.

Rather than developing along the river, Portland could pay to keep it undeveloped rather than having to install and run a water purification system.

“I’d just like to see that considered when we look at environmental regulations that ‘hinder development,’” Vlaun said.

Mary Ann Palmer of the Palmer Development Corp. had a simple request: Drop a requirement that State Troopers accompany modular homes wider than 16 feet down the highway. She said each trip costs $1,000, twice as much as the private vehicle escorts that accompany the smaller homes her company moves.

More than 30 attended the forum, which was held in the conference hall at C.N. Brown in Paris.

Copyright (c) 2011, Sun Journal, Lewiston, Maine

Distributed by McClatchy-Tribune Information Services.

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