Call center companies that accept state tax breaks or grants and then move jobs overseas are like motorists who flee the scene of an accident, says Rep. Stanley Short Jr.

“They are like any hit-and-run driver,” the Pittsfield Democrat said. “If they are going to do that, they should be made to pay the damages.”

Short is the sponsor of L.D. 9, “An Act to Retain Call Centers in Maine,” which would require call centers to repay state grants, loans or tax breaks if they move Maine jobs overseas. The bill, which had a public hearing last week, is generating push-back from the Maine business community and the administration of Gov. Paul LePage.

Several businesses, the Maine State Chamber of Commerce and officials with the Maine Department of Economic and Community Development warn that a repayment requirement would discourage companies with sizable customer service divisions from moving to Maine or expanding here.

“It makes Maine an outlier,” said Peter DelGreco, president and CEO of Maine & Company, a private, nonprofit corporation that provides consulting services to businesses looking to relocate to Maine or expand here.

Maine competes with other states to attract companies, and this legislation would effectively remove it from consideration for any company that has a significant customer service function, DelGreco said. No other state in the nation has these restrictions, he said.

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The bill would require the Maine Department of Labor to track companies that move call centers, or 30 percent of the call volume within a call center, from Maine to a foreign country. Companies would have to give the state a 60-day notice if they are moving work overseas, or else face stiff fines. In addition, the bill would require that all call center work contracted with the state government be performed in Maine.

The bill is nearly an exact duplicate of one passed by the House and Senate last year but killed in the Legislature’s Appropriations Committee. That bill’s sponsor, Troy Jackson, the former Democratic senator from Aroostook County, said that many industries are outsourcing jobs, but call center workers face the greatest risk because the businesses require so little in capital investment that they can easily be relocated.

Sponsors of L.D. 9 can rattle off the names of numerous call centers that have closed operations in Maine over the years, but they aren’t able to identify a specific company that had received a tax break and then moved jobs overseas. Rep. Short said the bill is aimed at making sure companies can’t do this in the future.

State tax incentives for new or expanding companies generally come from two sources: block grants and the Pine Tree Development Zone program.

Companies receive grant funding through the federal Community Block Grant Program, which is administered by the Maine Department of Economic and Community Development, and in some cases by municipalities. Since 1998, 12 companies with call center operations received a total of $3.7 million in funding administered by the state. The companies created more than 2,000 jobs.

In addition, companies located in Pine Tree Development Zones are eligible for various tax breaks for up to 10 years when they create new jobs in certain business sectors, including information technology and financial services. The tax breaks include corporate tax credits, sales- and use-tax exemptions for both personal and real property, and income tax breaks of 80 percent. There are 11 companies in Maine that could be affected by the bill and are eligible to receive tax breaks through these programs, said Doug Ray, spokesman for the DECD. The sum of the tax breaks is not available, Ray said.

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Opponents say the bill is trying to fix a problem that doesn’t really exist any more. Call center companies did move jobs overseas, but now those jobs are coming back to the U.S. because consumers are demanding quality customer service, DelGreco said.

Half of the call center jobs created in 2014 globally were in the United States, according to Site Selection Group, a Texas-based location advisory and economic incentives firm.

In the third quarter of 2014, there were 9,949 jobs at Maine call centers, up from 9,571 during the same period in 2013, according to research by the Maine Department of Labor. The jobs were located at 125 work sites operated by 81 companies.

Jason Levesque, founder and CEO of Argo Marketing Group Inc., which employs 500 people in Lewiston and Pittsfield, said the bill’s biggest problem is its ambiguity. Large companies in other states and countries outsource their “customer contact” work to his company. If a client cancels a contract with his company and moves that work overseas, Levesque said, it’s unclear whether his company or his client could be liable for paying back money to the state.

“Nobody wants to be the first one brought down on the mat before a judge or panel to explain why they are not in violation,” he said.

In 2011, Levesque’s company received $83,000 in community block grant funding to buy computers when he opened an office in Pittsfield and hired 60 workers who had lost their jobs when a call center closed. He said he now employs 100 people there.

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Another opponent who says the bill creates too much uncertainty is Andrea Cianchette Maker, a lobbyist for WEX Inc., a South Portland-based payment company with a sizable customer service operation. She also lobbies on behalf of athenahealth, a health care information technology firm in Belfast. Both companies testified in opposition to the bill.

“The proponents aren’t trying to cripple the Maine economy and aren’t trying to cripple job creation, but the way this bill is written would do just that,” she said. “It would create such a layer of risk it would make it very scary for a customer service company to invest here in Maine.”

Rep. John Martin, D-Eagle Lake, a co-sponsor of the legislation, doesn’t buy that argument. The bill may deter some companies from moving to Maine because it would make it harder to cheat taxpayers, Martin said, but most companies should have nothing to worry about.

“If they are good corporate citizens, and not coming in to take advantage of the situation and build a company to the position where they can move it offshore, I don’t know why they would be afraid to come to Maine,” he said.


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