May 19, 2019
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Business leaders rip bill to penalize call centers that ship Maine jobs overseas

Amber Waterman | Sun Journal
Amber Waterman | Sun Journal
Argo Marketing Group CEO Jason Levesque.

AUGUSTA, Maine — Jason Levesque lost a bid for a contract Tuesday to a competing call center in the Philippines.

He understands pressure from overseas. He understands wanting to keep work here.

The president and founder of Argo Marketing Group, headquartered in Lewiston, told legislators Tuesday that he doesn’t understand LD 9, An Act to Retain Call Centers in Maine.

The proposed bill would penalize call centers that move 30 percent or more of their work overseas and force them to pay back state grants, loans or tax breaks. It wouldn’t ding them if they moved those jobs to another state. But it’s not entirely clear, several speakers said, what’s considered a call center.

And, Levesque said, his clients are nervous it would somehow apply to them just by hiring Argo and working with someone else offshore at the same time.

“Frankly, it’s one of the poorest written documents that I’ve ever seen,” Levesque said Tuesday during a public hearing in front of the Labor, Commerce, Research and Economic Development Committee. “This is the first piece of legislation that has made my phone ring and emails burn up from people around the country and around the world questioning Maine’s sincerity on keeping the contact center industry here.”

State Rep. Stanley Short Jr., D-Pittsfield, who sponsored the bill, said it was about giving more security to call center employees and making sure Maine tax dollars don’t finance overseas growth. He pointed to closures in Wilton and Orono that put hundreds of people out of work when those calls moved overseas.

Good corporate citizens will still come, he said.

“I call it a hit-and-run when a company takes advantage of the financial goodwill of a municipality or state and then runs off to another country,” Short said. “This bill will ensure that just like anyone else that was involved in a hit-and-run, they will be made to pay the damages.”

The Maine AFL-CIO and two Portland call center employees spoke in favor of it.

The Maine Department of Economic and Community Development, Maine Department of Labor, Maine State Chamber of Commerce and others spoke against.

Peter DelGreco, president and CEO of Maine & Company, said he pitched 2,900 businesses on moving to the state last year and hopes to pitch Maine to Warner Brothers, McGraw Hill, MolsonCoors, Twitter and Facebook at a trade show next month.

This bill would make companies scratch Maine off a list of maybes fast, he said. Like Levesque, he wasn’t aware of any other state in the country with similar legislation.

“That’s an outlier list I desperately don’t want to be on,” DelGreco said.

Doug Ray, speaking on behalf of the DECD and Republican Gov. Paul LePage’s administration, said unlike some states that give money upfront, most Maine incentives are structured so that companies have to hit performance benchmarks — create so many jobs, for instance — before reaping any of the incentive.

He warned passage could “stunt future growth.”

“Issuing a claw-back on an incentive that a company has already earned and done the work for feels really wrong,” DelGreco said.

Matt Schlobohm, executive director of the AFL-CIO, said Maine had already seen plenty of manufacturing jobs move overseas.

“That very same process poses the exact same threat to our service economy,” he said. “The economic research shows that one in four U.S. jobs is actually susceptible and vulnerable to offshoring.”

Part of the bill would require the DECD to maintain a public list of call centers that are relocating work, a list, Schlobohm said, he’d be interested in seeing.

“I think it’s relevant data. I think it makes for better policymaking,” he said. “If this bill does have a chilling effect, let’s figure out how to fix it, but I think on its face it does some pretty reasonable things.”

Maine has at least 9,949 call center jobs, nearly 2,000 of them in Lewiston-Auburn, according to estimates from the Department of Labor’s Center for Workforce Research and Information. It’s a difficult industry to track, with many companies self-reporting as something else, such as Internet services or marketing consultants.

No one at the hearing could say how much Maine has given to call centers in incentives or tax breaks.

Levesque, who has 450 employees, said he’s received incentives twice: One $125,000 grant and 10-year tax break in Lewiston tied to rehabbing a vacant building on Lisbon Street and creating and maintaining at least 150 new jobs there, and the second time in Pittsfield, where he took over a call center in 2011 that had just shipped its 60 jobs overseas. In exchange for an $83,000 grant, he had to create and maintain three jobs.

That Pittsfield center is now up to 120 employees, but Levesque told the committee he’s in a hiring freeze there until the bill in front of them is sorted out.

According to Levesque, similar legislation had been introduced verbatim in more than 13 states, failing each time. A bill like it passed the Maine House and Senate last session but stalled in Appropriations.

“It’s sending a message that this legislation will keep being introduced session after session until it’s pushed through and eventually becomes law,” Levesque said. “This business environment is too risky. In order for me to grow my business, I can’t risk the fate of the rest of my employees on what may or may not happen here in Augusta.”

 



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