Revenue raised through taxes is how we pay for things that benefit all of us, like schools, roads, parks, public safety and clean water. According to Maine Revenue Services, the state loses more than $1 billion in revenue – an amount roughly equivalent to what the state spends on K-12 education – to dozens of business tax incentives annually. Because money allotted for this purpose minimizes potential investments in other priority areas, including workforce development, it is necessary to ensure all tax expenditure programs provide the intended results.

Unfortunately, this doesn’t often appear to be the case.

Programs that use public funds should be well designed so that money raised through taxes is not wasted, strengthens our communities and promotes long-term growth and opportunity for all Mainers. But most reviews of tax incentive programs by the state Legislature’s watchdog arm, the Office of Program Evaluation and Government Accountability, show the opposite – that Maine’s business tax incentives are not well targeted to meet the goals of Maine’s 10-year economic development plan, such as promoting innovation.

A recent review of the Maine Seed Capital Tax Credit program by OPEGA falls in line with findings from the Maine Center for Economic Policy that business tax incentives rarely produce the outcomes they promise or benefit people with low and moderate income. Because of deficiencies in data reporting, OPEGA is unable to confirm the claim that the Maine Seed Capital Tax Credit is working because it attracts job-creating investments. It’s likely that any new investment that did occur would have happened without the credit and that’s before determining if such investment actually added jobs.

But jobs require workers, and because of the pandemic many Mainers are not returning to the workforce. Effective ways to remove barriers preventing Mainers from returning to work include controlling the spread of COVID-19, expanding child care and other social infrastructure supports and enhancing the quality and quantity of jobs that match workers’ skillsets and provide good pay and benefits. Many investments needed to address these concerns – a significant number of which predate COVID-19 – are often jeopardized when state revenues are reduced by ineffective backdoor spending on businesses. The reality is that most of the businesses that benefit are large entities such as Walmart that will still operate in Maine even without state subsidies.

The real way to build a strong economy is by making sure every Mainer can pay their bills and keep up with basic spending. When working families spend money in their local communities, it circulates through the economy, creating more jobs and supporting long-term growth. And the best way to remove barriers to returning to work is to ensure that workers are safe and protected so they can support themselves and their families.


If Maine really wants to compete in a global economy and attract investors, it should be able to boast comprehensive supports for workers and for preparing the future workforce, like subsidized child care, quality early education and pre-K and strong paid time off and paid family and medical leave laws. And let’s not forget about quality schools, roads, parks, public safety and clean water.

But how can we pay for all that?

As suggested in a Nov. 12 commentary, we certainly agree that “money doesn’t simply fall from the sky.” On the contrary, scrutinizing the value of tax incentives, eliminating loopholes that allow people with wealth and corporations to avoid paying their fair share and closing the tax gap between what is owed and what is paid will provide resources to help Maine working families thrive and build a stronger, more inclusive economy. With this additional revenue, we can invest more in infrastructure and supports that help families and small businesses thrive.

The best investment for Maine is its people. Only when everyone has what they need will our economy work for everyone.

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