Gary Anderson

Gary Anderson

LD 1781, An Act To Encourage New Major Investments in Shipbuilding Facilities and the Preservation of Jobs, finally received an ought to pass majority blessing from the Legislature’s taxation committee and the expected green light from both legislative chambers.

The BIW economic engine’s corporate gravy train now rolls on with an overwhelming but hardly complete endorsement from Maine’s legislature. Twenty percent of both houses voted against the measure. Although BIW will have to comply with some new pesky accountability and stricter guidelines, it will still continue receiving a $3 million yearly tax break. The previous 20-year term of that low-hanging fruit has been reduced to 15, deceasing the overall amount from $60 million to $45 million, but in practical terms the amount received annually remains the same. For another decade and a half, BIW’s special taxation privileges are essentially assured.

Some argue that such assured taxpayer skin in the game is actually a requisite element in BIW securing contracts, as if the Navy is truly swayed by the level of home state fealty. If that were the case, Ingalls’ benefit of a far, far greater Mississippian largesse would win every contract. When BIW looses a bid it’s hard to believe that insufficient state underwriting can be credited as the cause. In hunting for a reason to give away millions of tax dollars to benefit a cash flush corporation one needs to find a different dog. Though nevertheless voting for the legislation, the taxation committee’s Rep. Ryan Tipping, D-Orono, aptly characterized such taxpayer competition as a race to the bottom.

LD 1781’s sponsor, Rep. Jennifer DeChant, D-Bath, opened the house debate of her bill by touting BIW’s undisputed economic prowess. Emphasis was put on its $350 million payroll having an important ripple effect well beyond her immediate legislative district. Customary praise was bestowed on BIW’s legendary Bath built is best built shipbuilding superiority.

The fact that all of that is indeed unchallenged accepted fact didn’t seem to matter in her set piece supporting argument intended, by a display of sheer overwhelming boosterism, to dismiss all criticism of BIW’s request for continued financial assistance despite an entrenched refusal to make its own case for any actual economic need on its part.

Establishment of such need, either by the sponsor of the bill or by the sole recipient of its tailor-made tax break, wasn’t apparently considered either essential or even germane to Maine continuing a decades-long one-of-a-kind multi-million entitlement to one of the state’s most successful businesses.

That BIW’s in no need of economic development was made publicly plain by Sen. Dana Dow, R-Waldoboro. After chairing the taxation committee’s majority approval he then tellingly amended the bill to terminate any ongoing BIW Pine Tree Zone incentives.

The predominant bi-partisan argument for voting for the bill was that it was an investment Maine couldn’t afford not to make in promoting the general welfare of all Mainers.

Some conservatives argued that, in fact, this wasn’t corporate welfare at all because the payroll tax refund component of the original tax break had been removed. BIW will now simply pay less taxes. Instead of a handout from the general fund they’ll just keep more of their own earnings rather than receiving any taxpayer money.

So, the Republican assertion claimed that a multi-million tax break is at once both a necessary investment while not really even taking place at all.

That straw man at least expressed some very loosely constructed logic.

Democrats that supported the bill didn’t even formulate anything approximating a logical rationalization.

Brunswick’s Sen. Brownie Carson started his floor speech enumerating one reason after another as to why he was conflicted over the bill only to close by making a complete about-face, stating that he’d vote for the bill and then work even harder to find necessary funding for civic needs that the bill’s revenue loss would make even more difficult to achieve.

That Mainers will have to shoulder BIW’s tax avoidance regarding those beleaguered public coffers somehow got ignored in the political shell game giving a bi-partisan bum’s rush to the 1/5th of the legislature refusing to go along with what they identified as corporate welfare on steroids.

Calculating that the sought-after tax break represents 100th of 1 percent of BIW’s operating costs, Rep. Ralph Chapman, G-Brooksville, made the analogy that if he needed a new car he might go to his neighbor and ask for $100 but that would be a shameless request.

Sen. Geoffrey Gratwick, D-Bangor, voted no because tax incentives don’t work, the bill wasn’t economic development and, plainly, not good policy.

Surreally reinforcing that assessment, General Dynamics simultaneously, paradoxically and unashamedly announced a planned major investment in BIW’s complete replacement of its Hardings Plant without any still forthcoming LD 1781 tax incentivization, while BIW, unblinkingly, announced continued strategic layoffs.

Realistically, praising LD 1781 as a jobs bill sounds fine except that there’s no inherent job creation in the bill. Incentiviztion sounds equally fine, but BIW isn’t going to increase its labor or infrastructure overhead merely to continue receiving the transparently small potatoes investment of such an unneeded taxpayer carrot.

Gary Anderson lives in Bath.


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