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Question 1 erodes Maine’s ability to appeal to businesses

Seth Koenig | BDN
Seth Koenig | BDN
Dana Connors, president of the Maine State Chamber of Commerce, addresses reporters during a news conference in Portland, Oct. 31, 2013.
By Dana Connors, Special to the BDN

The Bangor Daily News editorial of Oct. 23 on Question 1, at least in part, misses the point our organization and 14 others tried to convey last week. It implies Maine somehow, somewhere has $6 million to give up in our limited arsenal of investment incentives. At the same time, it tries to assure Maine businesses that in 45 days a government agency with little overall experience in this policy area can identify these “low performing” programs when past legislatures have spent entire sessions without having been able to do so. We simply aren’t convinced, and Maine voters shouldn’t be either.

Let me say up front the Maine State Chamber of Commerce is not opposed to clean elections. But Question 1 is not just about clean elections. We are opposed to the measure’s funding mechanism that permanently takes $6 million out of business tax incentives, used to attract and retain jobs in this state, to fund political campaigns. The language does not say you “may” find $6 million. It says a legislative committee “shall” find $6 million from “low performing” incentives. What does “low performing” mean, and who will define it? We aren’t sure. There is no guidance for OPEGA here, but they have 45 days to figure this complicated problem out and for a legislative committee to recommend the cuts.

Over the years, the Legislature has carefully crafted business tax incentives to help our businesses compete regionally, nationally and globally and to spur investment and create jobs. How do we know Maine’s business tax incentives are working? Because businesses don’t get a dime unless they invest. And these programs repeatedly have been scrutinized by the Legislature and will continue to be going forward.

Elimination of these tax incentives will no doubt impact those Maine businesses directly if they utilize the incentives but also indirectly if they do business with companies that utilize them. That means that small businesses, not just big business, will be hurt by this cut. Eliminating the few business tax incentives Maine has on the books is like playing Russian roulette with the Maine economy. Programs such as the business equipment tax reimbursement program, or BETR, and the Pine Tree Development Zone program have been critical to attracting capital investment to Maine and helping to retain and create jobs in the state.

To suggest in any way that Maine’s tax incentives are generous is not true. Maine’s tax incentives are modest at best. Many states go far above and beyond what Maine provides for tax incentives to businesses. New York State gives away 10 years of free taxes to businesses that locate there. That is the tip of the iceberg. Many of our competitor states are sending economic development representatives here trying to lure Maine businesses from our borders with generous tax incentives — incentives we cannot hope to match. Yet here we are proposing to cut $6 million in job creation money to publicly fund elections. Can Maine afford not to be competitive? I think not.

The BDN’s editorial spends time talking about what we don’t know about our economic development incentives here in Maine and gives the impression that these answers can be quickly and easily obtained by a quasi-governmental agency. We would ask, if this were the case, doesn’t the BDN or one of the legislative supporters of Question 1 think that in these deeply difficult state budget negotiations, such easy, “low performing” programs already would have been identified and cut?

In fact, the Legislature already eliminated several key business tax incentives in the budget this past legislative session without regard to the impact to Maine’s economy. Some of those incentives — the high technology tax credit and the research and development credit — were designed to attract the very high tech industries we want in Maine.

Last week, the Maine State Chamber joined 14 other business associations from around the state to form a coalition in opposition to Question 1. These associations represent thousands of Maine businesses across the state, and they are all opposed to the funding mechanism contained in Question 1. If we want to bring jobs and opportunities to this state, we must have the tools to demonstrate our favorability and desire to bring them here. Question 1 erodes our state’s ability to make our case.

That’s what we know.

We can keep Maine competitive by voting no on Question 1 on Nov. 3.

Dana Connors is president of the Maine State Chamber of Commerce.


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