June 22, 2018
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More corporate welfare is a poor use of Maine’s tax dollars

George Danby | BDN
George Danby | BDN
By Bruce K. Gagnon, Special to the BDN
Updated:

The Maine Legislature is considering LD 1781, a $60 million corporate tax break giveaway to General Dynamics, owner of Bath Iron Works. The bill will soon go to the House and Senate for a final vote. Now is the time for Mainers to speak out.

It’s been interesting to watch legislators who complained about Sen. Susan Collins supporting the Trump tax bill turn around and support a similar bill (on a lesser scale) in Augusta. And politicians wonder why citizens have become so cynical and many have given up on politics. The idea of truth, fairness and justice seem to get squeezed out of the process in Augusta just like in Washington.

I’ve been on a hunger strike against LD 1781 since Feb. 12, and now about 30 others around Maine have joined by fasting for days at a time. During this period, I’ve been going down to the Bath shipyard during shift change to stand with a sign and hand out flyers. I’ve had some very interesting conversations with workers.

Some workers I met are not in favor of this corporate welfare bill for General Dynamics. Two told me they were angry about the last contract that froze wages and forced givebacks in health and pension benefits. Other workers talked about General Dynamics’ stock buybacks — from 2009 to 2017 the company bought back $14.4 billion of its own stocks — driving up market share. Buybacks benefit corporate executives like General Dynamics’ CEO, who made $21 million in 2016.

On my flyer I handed out at the shipyard, which I titled “Where is our solidarity?” I said, in part: “There are now 43,000 kids living in poverty in Maine. There is no money to fix pot-holes in roads and our bridges are deemed ‘deficient’ by DOT. Thousands in Maine have no health care. In rural Maine hospitals, schools and mills are closing. What could Maine do with $60 million that GD does not really need?”

It’s been rewarding to watch the level of interest and activity across Maine around this bill. There have been more than 80 letters to the editor by opponents published in 20 Maine media outlets. People really do care about how their tax dollars are spent in Augusta.

General Dynamics often plays the fear card, making veiled threats that the Bath shipyard might not be able to remain competitive if they don’t get this $60 million, the implication being that they would be forced to downsize or even close. We heard these words in 2013 when BIW asked the city of Bath for another tax break. (After pressure from residents, the City Council cut the request in half.) BIW is a money making operation for General Dynamics, and the backlog of ships continues to grow.

One important thing we’ve learned during the debate over LD 1781 is that when General Dynamics signs a contract to build ships in Bath most of its costs — worker training, equipment, materials, wages, utilities — are covered by the taxpayer-funded Navy budget. We also learned that General Dynamics’ taxes owed to Maine can be reimbursed by the federal taxpayers under the contract.

It is the job of the federal government to pay for the national defense. It is not the job of state and local governments to cover those expenses. But corporations like General Dynamics have upped the pressure on states like Maine (and Connecticut, where General Dynamics is demanding $150 million) and cities like Bath that are hit up for tax breaks.

Corporations are in business for one thing, and that is to make maximum profit. They don’t care where they get it as long as they succeed. But the role of government should be to strike a balance to ensure all the needs of the people are met. In order to pay for those needs, government must ensure that tax dollars are properly spent to do the most good. LD 1781 violates that mandate to do good.

The public should be alarmed about this corporate welfare bill. Most conservatives complain about welfare for poor people but remain largely silent about tax dollars given to the corporate class. Generally, liberals oppose corporate welfare, but sadly many legislative Democrats support LD 1781. Many legislators have put the demands of General Dynamics above the needs of those who presently suffer from poverty and neglect in Maine. To me, that is a real tragedy.

Bruce K. Gagnon is a member of Veterans For Peace. He lives in Bath.

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