LePage’s ‘open for business zones’ bill rejected in Senate behind arguments that it’s too generous

Posted April 11, 2014, at 6:22 p.m.

AUGUSTA, Maine — Senate Democrats led a charge against a proposal by Gov. Paul LePage to give large corporations major incentives to bring jobs to two former military bases in Maine, including a “right to work” prohibition on forcing workers to pay union dues.

LePage reacted to the vote by blaming Democrats for their “job-killing agenda.”

The Senate voted 22-13 to reject LD 1835 early Friday afternoon. Joining Democrats against the bill were Sen. Patrick Flood, R-Winthrop and Sen. Tom Saviello, R-Wilton.

The bill, unveiled by LePage during his State of the State address in February, is aimed at companies that would invest at least $50 million and create 1,500 jobs at either the former Brunswick Naval Air Station or the former Loring Air Force Base in Limestone. According to recent data from the Maine Department of Labor, there are only 13 businesses in Maine that meet or exceed those thresholds and all of them have been in Maine for decades.

The bill would give those businesses 20-year breaks on corporate income taxes, 20-year exemptions from the sales tax, five years of lower electricity rates, a tax increment financing deal for individual income taxes during which the companies could use the money for investing in their own operations, access to a $500 million pool of bond funding, training and recruitment help from the Department of Economic and Community Development, and access to the Competitive Skills Scholarship Program.

Though the right to work provision, which is seen by some as a labor union-busting measure, has been at the center of opponents’ arguments since the day LePage announced the initiative. However, Democrats voiced several other reasons for their opposition, including that the bill would give too many incentives to large corporations — effectively nullifying some of the reasons to pursue economic development in the first place — when there are small businesses across Maine that could benefit from the same incentives.

LePage said in a written statement late Friday afternoon that defeat of the bill along, with three others, have thwarted his efforts to create jobs. The bills cited by LePage include two of his own initiatives, a proposal to ask Mainers in a statewide referendum whether they want to cut $100 million a year in state spending and an effort to allow teenagers to work at movie theaters and bowling alleys. The governor also bemoaned a Democratic-sponsored bill that he said would penalize call centers, but which supporters said was designed to keep call centers from enjoying state benefits and then moving workers overseas. That bill has received unanimous support in the Legislature but has yet to go to LePage for consideration.

“Now they are chasing away major employers who would create high-paying jobs and long-term careers that would provide economic opportunities for Maine families,” wrote LePage. “This vote sends a very clear message: liberals would rather try to score political points than create jobs for Mainers.”

Sen. Andre Cushing, R-Winterport, who sponsored the bill on LePage’s behalf, said it would give Maine a better position in the worldwide competition for jobs. However, Democrats said Maine shouldn’t forego the benefits that come along with economic development, namely revenues for state and local governments.

Sen. Stan Gerzofsky, D-Brunswick, said the closed Navy base in his hometown, which is now known as Brunswick Landing, has attracted 50 new companies since the Navy left and without any state subsidies other than the state’s Pine Tree Development Zones program.

“We didn’t ask for anything about getting rid of our unions or getting rid of right to work for less,” said Gerzofsky. “We asked for tools, but we never asked for a handout. We never asked to subsidize any of these companies. … Jobs in Maine are always going to develop on her citizens and their can-do attitude, not this kind of legislation where we’re begging people to come here and we’ll give them anything to do it.”

Sen. John Cleveland, D-Auburn, said he doesn’t believe that all workers should be in unions, but that they should have freedom to choose.

“I think people have a right not to organize and most employees don’t,” he said. “I very much support the right that people that feel like they need to protect themselves, that they should be able to take a vote and decide.”

He also said luring businesses with generous subsidies amounts to “corporate welfare.”

“In today’s world, it’s all about what do I get, how much money can I make, and I’m not worried if that small business down the road goes out of business and the schools don’t have enough money to educate kids,” said Cleveland.

Republican Sen. Ronald Collins, R-Wells, said that if Maine doesn’t start doing more to attract businesses, the businesses will simply choose other states. He said he sees the effects of that just miles south of his home, across the New Hampshire border.

“They’ll pay for it. If they want the new industries and high-tech industries in their states, they’ll give tax breaks and the incentives,” said Collins. “Maine has a lot to offer but we’d better wake up and face the facts. There’s a very competitive arena out there.”

The bill faces further votes in the House and Senate.

 

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