December 11, 2018
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Push to extend $60 million tax break for Bath Iron Works clears key hurdle

Linda Coan O'Kresik | BDN
Linda Coan O'Kresik | BDN
2017 file photo of Bath Iron Works

A bill that could provide up to $60 million in tax breaks for Bath Iron Works during the next 20 years will head to the full Legislature for consideration following a committee vote in its favor on Tuesday.

The Legislature’s Taxation Committee has been deliberating on the bill for weeks, culminating in Tuesday’s vote with a roomful of shipyard employees looking on and protesters opposing the bill in the hallway.

The bill, LD 1781, would essentially continue the Shipbuilders Tax Credit that BIW has been receiving for the past 20 years in exchange for $200 million in investments over that period and and maintaining a certain employee count. However, the new bill has arguably more strict qualification criteria and the shipyard could receive lower tax breaks if employment or investment levels dip below certain tiered thresholds. Bath Iron Works currently employs about 5,700 workers.

The company and the bill’s supporters argued that BIW needs state help to remain competitive in bidding for Navy contracts against shipyards in other states that make heavy public investments. Opponents said BIW’s parent company, General Dynamics, doesn’t need help with profits.

All of the committee’s Republicans and all but two Democrats who were present Tuesday voted to recommend the bill.

“If your parent company is making $3 billion in profit, you don’t need a tax credit,” said Sen. Justin Chenette, D-Saco, who cast one of the two committee votes against the bill Tuesday afternoon.

Rep. Janice Cooper, D-Yarmouth, also opposed the bill because, she said, Maine can’t afford it while paying for roads, schools and other social services.

“It’s too little because $60 million isn’t going to make or break whether you are competitive,” said Cooper. “It’s too much because we can’t afford it.”

The bill will go to the full Legislature with a recommendation for passage, although Chenette and Cooper can submit a minority report arguing against it

“We need to assist all of our employers, especially one with such a specialized workforce,” said Rep. Gay Grant, D-Gardiner.

The bill, which has been amended after being presented by Rep. Jennifer DeChant, D-Bath, includes a provision that requires the Legislature to reconsider the program’s benefit to Maine after 15 years.

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