Re: “Payday at the mill” (April 19):

Whit Richardson’s piece on Cate Street and the Millinocket mill is a well-done feature on a difficult topic.

It is hard to understand how the one-day loan shenanigans worked exactly, but it leaves egg on the face of those who promoted the program.

It reminds me of the time in 1995 when the Legislature was in such a hurry to pass the Business Equipment Tax Reimbursement program to fulfill a new governor’s campaign promise to the Maine State Chamber of Commerce – only to find out later that the benefit could be double dipped with tax increment financing deals.

I first became aware of what we had done while attending a presentation to a local town by an attorney from a major law firm. When the benefits were all laid out in a spread sheet, it was obvious that things had gone too far.

Later, in 1998, Bath Iron Works asked for special tax benefits to induce its new owner, General Dynamics, to build a land-level shipbuilding facility. They needed to keep up with far more liberal benefits granted by Mississippi to BIW’s competitor in Pascagoula. It was a question of whether BIW could stay open.

In response, we created a credit tied to the company’s future payroll taxes. Thus the benefits were proportional to – and conditioned upon – the number of Maine jobs they created or maintained. There was no need for clawbacks.

Refundable tax credits – those that are paid without condition – are nearly always a mistake. It’s what the movie industry wants wherever they go. They insist that each state pay them to come.

I suggest that when the state becomes an equity investor, it should receive a piece of the box office revenue – perhaps the same percentage as Meryl Streep.

Peter Mills

former Republican state senator