April 22, 2018
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BIW wins initial support for $45 million tax break

Troy R. Bennett | BDN
Troy R. Bennett | BDN
File photo of Bath Iron Works' largest crane towering over the shipyard in Bath.
By Christopher Cousins, BDN Staff

A $45 million tax break for Bath Iron Works sailed toward approval Tuesday with a 117-31 House vote in support of extending tax credits for one of Maine’s largest employers.

Tuesday’s vote was the first time the bill, which has been under development for months, came to the full House for consideration. It aims to extend expiring state shipyard tax breaks that have been in place for decades.

The debate has centered on whether the state receives enough return for the investments, which in this case comes in the form of lost tax revenue on one hand and more than 5,000 high-paying jobs with benefits on the other.

“There is no denying that Bath Iron Works is a statewide economic driver,” said Rep. Jennifer DeChant, D-Bath, who sponsored the bill. “Please don’t tell me that it’s too big to fail. … There are other shipyards that are growing their capacity to compete.”

While Tuesday’s House vote was convincing, DeChant’s bill has emerged as one of the most hotly contested legislative proposals of 2018 in terms of the number of people it has drawn to the State House. On Tuesday, the hallway between the House and Senate was packed with mostly opponents who argue that corporations, particularly those in the business of making war machines, shouldn’t receive public support.

BIW has received a total of $60 million in state tax breaks over the past 20 years, which started in the 1990s when the shipyard was in danger of failure. DeChant’s original proposal called for another $60 million in breaks over another 20 years, but it was pared back by the Taxation Committee to $45 million over 15 years.

In addition to reducing the time span and bottom line, the current version of the bill also requires BIW to maintain certain employment levels and make at least $200 million in infrastructure investments to receive the full tax break.

Rep. Janice Cooper, D-Yarmouth, was among the lawmakers who voted against the bill.

“It’s poor tax policy to give a tax incentive that amounts to a bailout for an entity that is not failing,” she said during floor debate on Tuesday. She countered arguments made earlier that Maine needs to compete with the millions of dollars of subsidies from the state of Mississippi, which is the home of BIW’s chief competitor, Ingalls Shipbuilding.

Cooper said Mississippi’s investments in shipbuilding come at a cost to its education system and public infrastructure.

“They do not spend their money on their people,” she said.

Rep. Ryan Tipping, D-Orono, who co-chairs the Taxation Committee, voted for the bill and said it would set a precedent for other companies requesting tax breaks in the future because it includes a variety of taxpayer protections such as performance benchmarks and transparency measures. However, others pointed out that the BIW tax break bill follows a bill approved last year which provided tax incentives to Westbrook’s IDEXX Laboratories.

DeChant’s bill goes to the Republican-controlled Senate for consideration next and faces a number of additional votes in both chambers.

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Correction: An earlier version of this story misrepresented comments by Rep. Ryan Tipping, who said taxpayer protections in the bill would serve as examples for companies requesting similar tax breaks in the future.


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