AUGUSTA – I couldn’t help but respond to the article by Naomi Schalit and John Christie that criticizes tax incentives and similar programs, suggesting they are risky to taxpayers (“Risky business tax breaks cost Maine $100 million per year,” Feb. 20).
Quite the opposite is true. Maine would be at risk of losing both businesses and jobs if the state did not offer programs to help keep Maine businesses competitive and keep jobs here in Maine.
Schalit and Christie go to great lengths to give readers the impression that the intended purposes behind all tax programs Maine offers is job creation. That’s simply not the case.
In many instances, job creation is not the intended purpose behind a tax incentive or program, nor should it be. The Legislature enacted many of these tax programs offered to businesses to place Maine businesses on a level playing field with other states that do not impose certain taxes. These programs keep Maine businesses competitive, helping to retain jobs. If businesses are not competitive, there will be no jobs.
The writers also give the impression that the Legislature is somehow failing to oversee these programs and is afraid of making changes because of political pressure. I would like to applaud the efforts over the years by the Legislature’s Taxation Committee for the numerous meetings on tax reform and studies done on the various tax incentives, exemptions, programs, etc. The Legislature has upheld the use of many of the tax programs Maine offers because they are working as they were intended to work.
For example, the Business Equipment Tax Reimbursement Program is working exactly as the Legislature intended. A company receives the reimbursement only if it invests. If it doesn’t invest, it doesn’t receive the reimbursement — end of story.
The tax reimbursement program and similar programs are an important investment in Maine’s economic future. They help retain Maine jobs while allowing Maine businesses to remain competitive in this global economy in which we operate and compete.
Let me tell you: Competition between states is fierce. As we emerge from this recession, states are becoming more and more aggressive in trying to attract new investment to their particular states and are offering a multitude of incentives to get businesses to relocate.
Just last week, one of my member companies talked about a recent visit he had from an economic development representative from a Southern state. This representative asked my member what he could do to “lure” his business (and jobs) from Maine to this particular state and what incentives the state was prepared to offer him if he chose to do so.
Thankfully, my member declined, as he had a family business here in Maine and had no intention of moving. But his comment to me was that if he hadn’t had the connection to Maine, the offer would have been difficult to decline. (And, by the way, the representative had six more meetings with other companies in Maine that very day.)
Schalit and Christie also give readers the impression that these companies take everything and taxpayers get nothing in return. We would strongly argue just the opposite. Companies that benefit from tax incentives and programs not only provide thousands of jobs but also provide indirect benefits in their communities.
All of these companies combined spend tens of millions of dollars on goods and services in Maine. In this way, they contribute directly to Maine’s regional and statewide economies and provide a multitude of indirect jobs and benefits to communities and families that depend on these industries for their livelihoods.
The Legislature and the state must continue to do everything in their power to enact reasonable policies that allow Maine businesses to remain competitive, grow their businesses and create jobs and opportunities for our citizens.
We are living in a truly global marketplace, a fact we cannot ignore. We must do everything possible to give our companies the tools like the tax reimbursement program that they need to compete on a global basis.
States that do this will win. States that don’t may be left fighting for the economic scraps and jobs in the process. Maine cannot afford to lose any investment to another state, nor can we afford to lose the opportunity to compete for any investments to another state.
We are risking more as a state if we don’t provide the necessary tools and keep our businesses in Maine competitive. Failure to keep Maine businesses competitive is what I would call “risky business.”
Dana Connors is president of the Maine State Chamber of Commerce.
- Special to the Press Herald