The Pine Tree Watchdog, as the Maine Center for Public Interest calls itself for the purpose, has turned up pertinent information about how the Pine Tree Development Zones program is working in luring businesses to Maine.
Part one of its investigative series, published in the Bangor Daily News and other Maine newspapers, raised questions but provided no overall answer as to whether the program is worth what it costs. The journalism center says it never editorializes.
It reported in the fifth paragraph that the program has cost “as much as $46 million in lost taxes since 2003, according to Maine Revenue Service estimates.” The Ellsworth American used that figure in its headline, “$46 Million in Tax Breaks.” The headline in the Bangor Daily News read: “Are Pine Tree Zones corporate welfare?” with a sub-headline, “Some experts believe there’s no evidence the taxpayer-funded program is needed to create jobs in Maine.”
The article caught the attention of Commissioner George Gervais of the Department of Economic and Community Development. He questioned the emphasis on the $46 million cost, saying in a brief telephone interview that the figure was only one side of the ledger. On the other side are the jobs produced, sales taxes and other items. He said he had already realized the program “probably could use some tweaking.”
He seemed to question the criticism of the so-called “but for” letters by applicants for Pine Tree Zone tax concessions. The law establishing the program says an applicant must demonstrate that but for the tax break it could not expand or start a new business. Several applicants ignored the requirement, saying they didn’t have the necessary information to base an opinion.
Clearly, some new jobs have been produced. The report said that proponents of the program say that without the tax breaks about 8,000 new jobs would not have been created. But balancing the cost of the program against the dollar value of jobs produced is elusive, and so is the question of what would have happened without the program.
Commissioner Gervais wants to know as much as anybody how the benefits balance against the costs. But he said he is waiting on a pending bill in the legislature that would correct errors in existing law that prevent funding of a biennial evaluation of a half-dozen government programs including the Pine Tree Development Zones.
But simple costs versus benefits is not enough. Companies sometimes take incentive benefits and, when the lures taper off or disappear, gallop off to greener pastures in China or elsewhere. That leaves Maine taxpayers as the losers.
So it is up to the Legislature to produce the money to fund an assessing group to tell us whether the $46 million tax breaks to bring jobs to Maine are really worth it. And broader scrutiny should tell whether the program should continue or end.
OMG is that Paula’s office with the giant portrait of Reagan and a bust of Reagan to boot? That is just plain infantile! As for the Pine Tree thing, yes it’s corporate welfare but it probably does do some good.
Love it!!! Too bad that picture can’t be replicated and installed a la mural in the Department of Labor conference room.
“Trickle down economics”! Yeah, put that up in the Dept. of Labor building. What a joke! All that did was facilitate corporations in moving jobs overseas. And the Tea Party is still trying to ram that one down our throats.
There ought to be 50 portraits of Reagan.
Yep with a heading over them, “Author’s of America’s 50 Greatest Failed Economic Policies”
That’s the great Renaldo Magnus.
I think I’ve stumbled on the funniest sentence in an editorial ever: “The journalism center says it never editorializes.” With headlines like, “Flaws in bill like skating with ‘dull skates,’” I’m not so sure.
It took me about 2 minutes to find that one. Imagine what someone with a journalism degree could find!
I get a charge out of the term ” investigative reporting “, it’s always slanted one way or the other ! We would be better served if the title were ” my opinion based on what I chose to look for ” or perhaps ” my twist of the facts “or even ” creative journalism “.
They don’t write the headlines; the newspapers do. The article says the study “raised questions but provided no overall answer .” The report didn’t say we should do this or that, it said what ti found. Maybe it’s a good thing.
Balanced questions requiring supportable answers from both sides. BDN has finally managed to strike the right balance between public advocate and responsible journalism. Good for you ! Now if Maine’s State Gov’t could do the same. A goal well worth achieving in these times.
ALL and I mean ALL money the Government hands out that is not EARNED is welfare. There are countless thousands ion this state playing the system for all they can. Companies do the same thing. Look at the old Stinsons building in Prospect harbor IT was converted to a lobster pound and got a big juicy grant from he state as long as they HIRED local folks. They did that met the grant requirements. Then playing by the rules the government set they fired all the locals and brought in all “foreign workers” at min wage. Welfare is a GAME if you support it then you are blind. If there was NO welfare then just think of how much less we would pay in taxes. The only way to fix it is to STOP ALL MEANING EVERY form of welfare.
$46million is a drop in the bucket compared to the positive economic impact this can have. By providing incentives for businesses to locate in Maine, we get jobs. With more jobs we have less unemployment, people off of welfare, saving millions. People will have money to spend, to buy the things they need, buy a new or better car and with all of the purchases it expands the tax base generating millions in revenue. Tax incentives net effect is it costs government less and provides more revenue to operate on. In the 1990’s the US Territories in the Caribbean created a program “Caribbean basin initiative”. Major corporations moved to the islands. Thousands of jobs were created. The Islands that participated now have bustling economies. All due to one thing “tax incentives” for businesses that could not be refused. No more welfare state and a low unemployment rate.