Ask anyone who has served in the Maine Legislature and they will tell you that inflammatory rhetoric is never helpful. Lawmakers learn over time that filtering out the bluster is the only way to get anything real done. That’s exactly what’s happened through the recent release of the nonpartisan Office of Program Evaluation and Government Accountability report on the New Markets Capital Investment Program.
The state-funded New Markets Capital Investment Program helps bring investment into economically depressed areas. It’s modeled on a bipartisan federal program that has brought tens of millions in new capital investment into some of the nation’s most struggling areas.
There has been a lot of bluster surrounding this program over the last year.
In Maine, the New Markets Capital Investment Program has spurred a significant amount of investment. Most of the projects funded through the program have been successful. But, as is the case with any type of investment, sometimes things don’t work out as planned. When the Great Northern Paper mill in East Millinocket closed in 2014 after the program was used as part of a plan to revive it, there was an unfair rush to judgment about the program that hasn’t done us any good.
Thankfully, the Government Oversight Committee, of which I am a member, commissioned a report from OPEGA to get to the bottom of the New Markets program. Instead of political grandstanding and armchair quarterbacking, we decided to wait until we had all the facts before making decisions.
OPEGA’s report was thorough and eye-opening. For the first time, Maine taxpayers have a full accounting of this program. And despite the criticisms levied by some in the Legislature and some in the press, the report shows that the New Markets program has been a solid investment for the people of Maine.
Let’s look at some of the facts about this program:
Every dollar Maine put into the New Markets program generated $21.67 of gross state product — a measure of economic activity, including sales, taxes and other activity — in return, according to the OPEGA report. That’s a heck of a return.
In terms of direct numbers, the return has been exceptional. Every dollar we’ve invested in the New Markets program has resulted in $1.19 of in-state spending.
OPEGA reported the New Markets program will result in a $15.8 million revenue gain for the state budget between 2013 and 2021. That’s money — in addition to the direct investment in our communities — that can fund other critical state programs.
The best news in this report was the impact on our workforce. OPEGA showed that the New Markets program created or retained 764 permanent Maine jobs. Additionally, the report showed it created or saved more than 1,000 indirect jobs. These jobs would not be here if it wasn’t for the New Markets Capital Investment Program.
How can you argue with these results?
OPEGA also identified opportunities to improve the program. Specifically, the report suggests that we need to do a better job keeping tabs on it so we can have a clearer and more timely understanding of the projects in which we invest. And OPEGA also gave us insight into some idiosyncrasies of the program that should be adjusted to make even more beneficial investments in the future.
We’ve heard a lot of bluster about the fact that the tax credits go to out-of-state companies. This is such a backward criticism. Anyone involved in economic development knows the most important thing our economy needs is investment from out of state. This is new money that grows our economy. Without it, we will simply continue to stagnate. The OPEGA report shows that the vast majority of projects were funded by investors who had never invested in Maine before. This is great news for Maine.
Maine’s economy is struggling to get a footing, and we need all the hard work and smart thinking we can muster to grow jobs in our state. As the OPEGA report clearly showed, the New Markets Capital Investment Program is one of those good ideas. With a solid rate of return and a real, tangible impact on our communities, this program has been a success. And as we move forward with the upgrades to the program suggested by the OPEGA report, it will serve Maine even better for years to come.
Sen. Tom Saviello, a Republican from Franklin, is serving his fourth term in the Maine Senate. He is a member of the Government Oversight Committee.