For $12 million a year, a program should be able to prove its worth. Pine Tree zones can’t.

What does Maine get for its investment in Pine Tree Development Zones, a $12 million-a-year jobs program?

Maine's Pine Tree Development Zones is a jobs creation program that provides benefits to companies even if they don't create any jobs, according to a study by the state's government watchdog agency. Derek Davis/Staff Photographer

It might be nothing at all. Don’t ask the LePage administration, because it has no way to figure it out.

That’s the conclusion the state’s watchdog agency came to in a disturbing report delivered to the Legislature last week.

The Office of Program Evaluation and Government Accountability studied the program that was created under Gov. John Baldacci in 2003 to entice businesses to move to and expand their workforces in economically disadvantaged parts of the state, using a package of tax incentives and discounts. A few years ago, the program was extended to the entire state except for the most economically active parts of York and Cumberland counties.

The goal of the program is to create jobs. But OPEGA found that because of the way it is designed, very few jobs have to be produced for a company to tap into the benefits. For instance, a company that creates one single job gets full Pine Tree Development Zone benefits for five years. And a company that doesn’t create any jobs at all can still draw down a full complement of benefits for two years. That means a company could invest in equipment that will actually cut its workforce needs over time, but still pay no income tax for two years or no sales tax on the cost of job-killing equipment – all thanks to the state’s jobs program.

What’s more, there’s no way of knowing whether any of the recipients of Pine Tree Development Zone benefits were really drawn to expand in Maine because of the program, or if they just got paid to do something that they would have done anyway.

In other words, bad design and a lack of oversight has Maine taxpayers on the hook for a jobs program that may or may not create jobs. If this were a social welfare benefit or an after-school program, the LePage administration would be screaming at the top of its lungs about the lack of accountability. But since the largesse is distributed as tax cuts, George Gervais, who heads the Department of Economic and Community Development, is still defending it.

In his rebuttal letter to OPEGA, Gervais said the study focused on “process and bureaucratic minutia,” and called on legislators to talk to more than 200 individual business owners who receive benefits under the program about how they feel about getting tax breaks from the state.

But anecdotes are no substitute for analysis, and Gervais does not have any way of knowing how much of the $12 million he will distribute this year has been wasted. Fortunately, the program will expire next year, just before a new governor takes office.

Unfortunately, businesses will be able to qualify for the benefits that last as long as 10 years right up until the deadline, meaning Maine taxpayers will still be writing checks with no idea whether they are wasting their money until 2028.

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