AUGUSTA — Whit Richardson’s Maine Sunday Telegram series “Payday at the mill” has certainly generated a lot of discussion over the last week. It has also generated a fair number of inflammatory statements that are not well founded in fact.

Mr. Richardson did a good job of getting the facts largely correct, but his conclusion that nothing was invested in the mill as a result of the state New Markets Tax Credit financing transaction is wrong.

The Finance Authority of Maine has administered the NMTC program since the Legislature created it in 2011. The program is largely modeled after a federal program and is designed to attract investment in businesses in economically distressed areas of the state.

The program allows eligible investors to claim state tax credits in amounts up to 39 percent of the amounts invested in an eligible project in the state. The credit is taken over a seven-year period.

FAME expressed concern about the Great Northern Paper NMTC transaction when it initially reviewed Cate Street’s NMTC application. As Mr. Richardson reported, the application included what are called “one-day loans” to make the investment eligible for tax credits larger than the actual amount of funds that remained in the business in which the investment is made.

While there was no prohibition on using a “one-day loan” in the governing law, FAME staff did not believe the transaction, as presented in the application, met the spirit or intent of the law. As a result, FAME required as a condition of its approval evidence of actual investments in the mill or its operations by Cate Street and related parties that met or exceeded the $40 million for which the application sought tax credits.

FAME in fact obtained evidence that over $40 million had indeed been invested. That money went toward many expenses falling in the category of operating capital, including millions in payroll and the purchase of raw materials (wood), all of which went into the Millinocket-area economy. A small portion went to what would be considered capital expenses, such as new buildings or equipment.

Nevertheless, the intent of the law – to foster actual investment and spending in a low-income community business – was, in fact, met in this case, despite how the initial application was structured.

Moreover, there were extraordinary additional economic benefits to the mill’s continued operation in the Katahdin region. A professionally prepared economic impact report submitted with Cate Street’s application estimated that the mill’s continued operation would generate approximately $256 million in average annual spending, including $117 million in direct mill spending, $82 million in spending by businesses that supplied the mill and $57 million in other general induced spending. These expenditures include all types of business expenses. Most notably, a total of $76 million was anticipated to be spent in wages and salaries.

Without the Great Northern Paper NMTC transaction, the mill likely would have been shuttered at least one year, if not two years, before its actual closure. Over 200 jobs were thus maintained in the area while the mill attempted to become financially stable. While these spending totals are only estimates, even if discounted heavily, it is safe to say that the economic impact of the mill’s continued operations far exceeded the amount of the state’s tax credit.

While one-day loans are permitted under the federal program upon which our state program is based, FAME has expressed concern about this issue from the inception of the program, and the Legislature is considering an amendment to the law championed by FAME to eliminate the potential for abuse and increase accountability in the Maine program.

It is important to keep in mind that several projects of great benefit to the Maine economy have successfully utilized the NMTC program without the one-day loan structure, including a $120 million project for St. Croix Tissue in Baileyville (for which the state awarded $16 million in tax credits) that may well not have occurred without the NMTC incentive. The St. Croix project helped to create and retain about 450 jobs in Washington County – no small feat.

Other successful projects have benefited from the program as well, including Athens Energy in Athens, Putney Veterinary and the Press Hotel, both in Portland, and Molnlycke in Wiscasset. Moreover, a recent report prepared by Charles Colgan, former state economist and Muskie School of Public Service professor, determined that the return to the state from the NMTC program has been at least $1.50 for every $1 in tax credits issued, even with the closure of the Great Northern mill.

It is highly unfortunate that the mill was not able to operate for longer than it did, and that the NMTC transaction involved one-day loans. We too are saddened that many hardworking Mainers lost their jobs or money as a result of its failure. These are harsh facts.

But the assertion that the Millinocket region and the state received nothing in return for the Great Northern Paper NMTC tax credits is false. Let’s focus on improving the program instead of making assumptions without a full understanding of the facts.