Fortunately for Maine, in 2011 a bipartisan group of legislators recognized the success of the federal New Markets Investment incentive and committed to replicating that success here in our state.
Legislative leaders understood that encouraging more private investment in distressed communities was critical to lifting people out of poverty. They knew as well that the number one priority was, and continues to be, stimulating economic opportunity and creating jobs, particularly in those areas of Maine hardest hit by high unemployment, poverty or measurably-low average income levels.
The New Markets Tax Credit, which gives individuals and corporate investors tax credits for making equity investments in low-income areas, is an innovative solution put forth by a coalition of members of Congress from across the political spectrum.
This bipartisan initiative, first enacted and signed into law by President Bill Clinton in 2000, stimulates private investment and economic growth in rural communities and low-income urban areas that lack access to the capital needed to support and grow businesses, create jobs and sustain healthy economies.
Former Sen. Olympia Snowe was a chief proponent of the measure; Sen. Susan Collins, U.S. Reps. Mike Michaud and Chellie Pingree have been strong supporters.
As a matter of fact, in early December, a bipartisan coalition of 70 members of the House of Representatives — led by Michaud and Rep. Steve Stivers, R-Ohio — sent a letter to the House Ways and Means Committee indicating their support for New Market Tax Credit provisions.
When it comes to attracting private investment capital, Maine is often referred to as a “fly-over” state. The fact is, investors have options available in larger states with more diverse economies.
Building upon the framework of the federal program, the Maine Legislature needed to ensure that Maine’s state-based New Markets Capital Investment Program would sufficiently incentivize out-of-state investors to take a second look at doing business in our state. And they have.
Within 24 months of the Maine New Markets Capital Investment Program being signed into law by Gov. Paul LePage, millions of dollars in private capital were raised and invested in businesses all across the state. Communities of all sizes, rural and urban, have benefitted from the Maine New Markets incentive.
Businesses like JSI Store Fixtures in Milo and St. Croix Tissue in Baileyville now have access to affordable capital through Maine New Markets. These businesses are expanding and hiring new employees. They’re purchasing equipment and materials from Maine suppliers. They’re developing new facilities. And they’re diversifying our economy.
With nearly 200 employees, JSI Store Fixtures is one of the largest employers in Piscataquis County. JSI has plans to create more than 100 more jobs with capital the company accessed with the help of Maine New Markets.
Without this funding, it is possible the business could have been merged with another one that would have eventually taken the jobs out of Maine.
St. Croix Tissue secured funding to purchase and install two new tissue machines at the site of the existing Woodland pulp mill in Baileyville. The tissue production facility is slated to create 60 to 80 direct, full-time jobs, with strong benefits and good training opportunities.
St. Croix has even committed to a plan where 60 percent of new employees for this project, when hired, will either be low-income persons or come from low-income families.
Without investment attracted by the Maine New Markets incentive, these businesses may not have been able to access the capital they needed to create and support good jobs right here in Maine.
The Maine New Markets Investment program has also successfully attracted investment that facilitates wood product diversification that will leverage our existing wood products economy and lead to international exports.
The wood products economy has and will continue to face challenges associated with market conditions compounded by an increasingly competitive international market.
The capital accessed through the Maine New Markets incentive gives our wood products economy an opportunity to compete in a competitive market while continuing to create jobs in the region.
The Maine New Markets incentive has delivered on its promise of attracting capital to job-creating businesses and is helping to retain and create jobs in economically distressed communities throughout Maine.
Dana Connors is president of the Maine State Chamber of Commerce.