MILLINOCKET, Maine — New England’s first torrefied wood facility will qualify for an additional $30 million in tax credits thanks to an amendment passed within the state budget Gov. Paul LePage signed this week, officials said Friday.
As proposed by Senate President and 2nd Congressional District candidate Kevin Raye, the amendment increases the cap on business self-investment tax credits offered through the state’s New Market Tax Credit program from $10 million to $40 million.
Raye, R-Perry, and state Sen. Doug Thomas, R-Ripley, said Raye proposed the amendment to the program’s guidelines and LePage signed it into law earlier this week with Cate Street Capital’s plans for the Millinocket mill site in mind.
“They needed a larger package than $10 million,” Raye said Friday of Cate Street. “Ten million would not do it for them. We looked at that and said, ‘Let’s look at increasing the cap.’”
Modeled after the federal New Market Tax Credit program, Maine’s program effectively sets aside a total of $250 million in tax credits for Maine companies generating new products or using new technology to produce energy.
Torrefied wood, which Cate Street proposes to manufacture through its subsidiary Thermogen Industries LLC, is described as a replacement for coal created through microwave technology that creates far less pollutants than coal.
Thermogen will submit a formal application to the Maine Department of Environmental Protection to build its first of possibly five $35 million torrefaction facilities at the Katahdin Avenue paper mill site sometime next week, said Scott Tranchemontagne, a company spokesman.
“We do plan on taking advantage of it,” Tranchemontagne said of the increased cap. “At the end of the day, it allows us to put together a stronger financing package, so it is good for the project. It will give it an even stronger chance to be successful.”
The first machine will generate less than 50 decibels of noise audible off-site, operate round the clock, draw less than 0.5 percent of the water the paper mill drew, and send wastewater to the town’s water treatment plant representing less than 0.2 percent of the wastewater plant’s total capacity, company officials have said.
Thomas lamented the need for such tax-credit programs, as they draw income tax funds away from the state. In the New Markets case, businesses that qualify can get their income tax reduced by as much as 39 percent if they hire many new workers or benefit other business such as those that supply them raw materials.
Thomas said he believed the program is good for the rural, underserved and economically distressed areas it is designed to serve.
The tax break program “only goes for six years and if they are investing that kind of money [approximately $35 million per machine] you know they will be there for more than six years. That is a 30- to 40-year investment,” Thomas said.
“It is too bad we have to do this, but every other state in the union is doing this. In some states, they will build them [investing businesses] a building and lease it for free,” Thomas said. “What do you do?”
“It is a real incentive,” Raye said of the program.
This will help Maine citizens right ?
This will help the Katahdin area and the citizens of Maine!
Corporate welfare.
More good news for Cate Street and Millinocket.
Good luck!
Not bad , $30 million for 25 jobs. Thats $ 1.2 million per job.
Most of the profit is going out of State. Cate Street Capital is a national company, and if you look at the executives and financial advisers, you’ll see how little of this money is going to stay in Maine:
http://www.catecapital.com/Home/IndustryOverview
At 10:15 AM …. 21 people with bad math plus one talking trash.
As I understand it, the grant is on a sliding scale, of sorts. The more Cate Street invests in the facility, the more people they hire, the greater the company’s tax break will be. I don’t know this for a fact yet, but I would be willing to bet — or speculate — that they won’t get the full break until or unless they achieve what they appears to be their greatest ambition for the Millinocket site: five torrefied wood machines, which would employ 22 to 25 people each with, depending on how you measure it, an indirect-to-direct job creation ratio of 4:1 to 7:1. In other words, if this site employs 100 workers, it isn’t unreasonable to assume that it creates 400 indirect jobs, from wood suppliers to truckers to railroad workers to restaurant staff. That’s the typical ratio estimated for manufacturing facilities and among the reasons why they are so prized — and why they get such tax breaks.
I don’t think anyone will know how much of a tax break Cate Street will get, specifically, until the company applies for it. Stay tuned.
What are the estimated total taxes including both state income taxes and property taxes, per machine of the five torrefied wood machines, with and without the credit?
Wish I knew. That info will become apparent when the machines are operational.
Generally, I would agree with the multiplier effect, but in the case of Cate Street, what does it matter if they don’t PAY their vendors? They haven’t paid most of their GNP vendors in MONTHS!
Pretty sweet they get a good deal for investing a pant load of money. Meanwhile, my little cottage industry that employs one (me) gets no break and the 40 hour job that supports me to try to grow this little business keeps reducing benefits, which keeps me from investing in my self-employment that could one day employ more.
We just gave these people $17 million a few month ago. Their accounts dept. must have Lepage on speed dial.
Nobody gave anyone anything. The state did assume the liability of 17 mil for the estimated cost of closing the landfill. More than likely a private firm will take over the landfill, run it, and assume that as the cost of doing business. Meanwhile, there are over 200 jobs contributing to the state coffers with more to come and many more indirectly doing so. You may want to try looking at the big picture.
Thank You for the positive comments… why do people need to be so negative????
Another huge gift to a town stuck in the past. We bought that dump, we paid years of unemployment benefits & job retraining benefits, we gave a bunch of tax incentive gifts to lure the charcoal plant, our (lousy) Governor is trying to lure natural gas to the area….but the citizens of the town we are saving can’t even make their own share of the payments? Really?
The dump isn’t in Millinocket, it’s in East Millinocket, and according to Millinocket officials they never agreed to more than a single payment, and have documentation of that. Either we believe the governor or Millinocket. Frankly, if the governor said the sun was shining I’d bring an umbrella with me. He’s lying, as usual.
The Millinocket area does not want a NP. GET OVER IT.
“but the citizens of the town we are saving can’t even make their own share of the payments? Really?” HA HA HA, just who do you think you are?
I would think you would be grateful that the extra jobs would cut down on that big welfare check you send us every month. Maybe you also be more informed about the torrified wood process and how it will be a big improvement for the environment as opposed to coal burning. BTW-you ain’t gettin’ your NP.
I suggest you research your facts before you continue your ill informed rant.
The dump thats not in Millinocket was going to be abandoned by Brookfield and left to the state to cleanup. The Governor is reviewing many proposals from private business to run and maintain it.
Our Governor LePage (a far cry better than the last two) and many others in Augusta worked very hard to get Cate Street to come up here and to spend millions of their own money to setup shop in both mills.
Cate Street has and will continue to increase its employment base here, as well as creating an industrial park to attract additional markets, a move that they were not obligated to do…!
Boo hoo… cry me a river
You make comments all the time about our area. You fail to mention that for many years this area was a zero recipient of funding from the State for education monies… How much did that save the State??? Before you shoot your mouth off get all the facts included in your statements please!!!!!
A corporation given 30 million dollars, by a country that’s 16 trillion dollars in debt. I wonder what kind of a cut Raye and LePage will get out of this 30 million dollar, corporate welfare scheme.
NO TAX BREAKS, PAY YOUR FAIR SHARE. just like every maine resident has done for years. I wonder if i hire a cleaning person to clean my house one day a week i can get any tax breaks.
Do you have a $35,000,000 vacuum cleaner in your closet?
No wonder Moody’s is downgrading our credit rating with these chuckleads in charge giving away money to corporations.
“Hey gang! Let’s look at raising the cap.”
Hey gang! Let’s get the money from the neediest Maine citizens.
Hey gang! Let’s put our credit rating in danger by passing hair brained tax cut schemes.
Unbelievable.
Our credit rating did NOT get reduced.
A ‘Tax Credit’ is not a payment from the government. It is a reduction in the taxes that the business (or person) pays. There is a big, big difference between getting money and not giving money. It doesn’t come out of anyone else’s pocket…it just doesn’t go into anyone else’s.
Moody’s has changed our credit outlook from neutral to negative.
They did so because they are less confident that Maine will take in enough money (taxes) to meet it’s obligations.
This will cause lenders to charge higher interest rates on our government bonds.
This article is about taking in less money by giving a corporation a tax break.
I suppose, by your logic, if we just reduced everyones taxes to zero, that should have no effect on borrowers’ confidence that we’ll pay them back when they give us a loan.
That’s nonsense. But it seems at the core of Republican public finance thinking.
Republicans like to say, “the market should decide”. Well, yesterday the market decided that Maine’s Republican budgets are heading in the wrong direction.
Thats good theater jason but you should do more homework.
Jason may be a PITA but there are times when he is 100 % dead on. This is one of them. The Bond market’s don’t change State Bond rating’s on a whim or giggle. That they did so when Paulie is in North Carolina is more to the point since in North Carolina he’s not going to be insulated like he is here in Maine. I’m just wondering what his first press statement is gonna be when he finally makes it ? Paulie keeps making noises about Maine Bond’s and their uses. Well here’s where he gets to put his Executive knowledge to use.
Not a ‘hit’ on Cate St or Millinocket but does anyone really think that this ‘tax break’ that was ‘worked out’ between Raye and LePage isin’t LePage’s, and the GOP’s, way of trying to get out of the current money mess that LePage put the State into with his idiotic deals and proposal’s ? This ‘deal’ is nothing more than Paulie and Company trying to payoff Millinocket, and avoid a near certain public ‘slamming’ in Court, with a taxpayer subsidized ‘tax break’ to Cate St., hoping that the ‘tax break’ will lead to Cate St. expanding and hiring more worker’s, which leads to more income tax and business tax revenues that Paulie’s people can then use and avoid having to pay Millinocket what they were due in the 1st place. Will the tax break provide for Cate St to expand ? No doubt it will, provided they use the tax break to actually expand and not just use it on their corporate books. But this whole mess needs to be looked at by both Cate St and the Millinocket Town Council as LePage’s way of trying to buy them off. Such tactic’s need to be seen for what they are, that is, as a way for the State to run out on it’s responsibility’s to both the community and local business and leave the taxpayer with the bill.
More corporate welfare while we throw our grandparents and kids out in the street. The irony is blaring!
We take care of our Grandparents and Kids! You?
This tax break is a sign that Maine is finally waking up. Fortunately in
this particular issue, the the pea-brained idiots who can’t see beyond
the end of their noses are NOT in charge this time. Tax breaks and
incentives are one-time, the jobs and economic boost they provide last
decades. And companies grow.
Our number one issue is jobs. In recent memory, Maine has been one of the hardest states in the nation for companies to operate in. Many, many other states — including Massachusetts, Conn., NY (read ‘historically strong economies where Mainers go to work’) — offer huge tax breaks and other incentives to get companies to move to their states, their counties, their towns. Even R. Quimby, who uses her money to “save” Maine wilderness, moved her operation out-of-state because it has been so hard to do business here – that means hard to make money and employ people and grow here.
A tax break cannot be divided by the number of initial jobs – that’s laughable. Divide the tax break by the future. By your kid’s chance in 15 years to buy a house because there’s solid employment in the community.
Let’s do more to imitate successful states, not less.
You are 100% correct! Unfortunately most of the negative comments here stem from the fact that the people from Millinocket and Katahdin area do not want a National Park. The pro park people will do and say anything, throw them all under the bus and continue to insult. If the people from the Katahdin area were PRO PARK you would see wonderful and positive comments from these people. It truly has been comical to see this play out.
You nailed it, perfectly!
If the business is so viable and growing why does it need to be subsidized with our tax dollars?it should be self sustaining.How many times has the state and federal gov.invested millions of tax dollars in business that went down the tubes after they spent the money,feathered there own nest and drifted off into the sunset.A deal brokered by the few makes me wonder are the lawmakers too busy getting ready for vacation that it was rubber stamped and more of our tax dollars are gone.
It is not being subsidized. There is a temporary reduction in the punitive high taxes to lure them in. This is not the government “investing” in “businesses” like Solyndra. Don’t assume a legitimate business can be viable and self sustaining with parasites draining it through Maine’s high taxes and controls.
the tax break is like the formation of local tiff districts and no town or city recieves taxes from that company the tax money that they would pay goes back into the companys pocket.just like the states tax refund policy for business it also gives back a rebate for companies.you read up on the tax policies for companies and for the ordinary person and see who is on the short end of the stick
Well OK, lets tell them to go find another state to start up their business! How is that, do you feel better now?
Money not taken from someone does not “go back into his pocket”, it doesn’t leave. Not taking something away from someone is not a subsidy. These industries are still paying enormous taxes. Most taxes are now for redistribution; those who don’t pay more for that than they already are are not being subsidized and are not taking anything from you.
The problem with these plans is that they are inequitable, not that they are allegedly subsidies. Everyone else is still paying the exorbitant high taxes the state refuses to let go of. Tax credits for new industry are an attempt to patch the problem without addressing the fundamentals and the cause. The state realizes that the high taxes have been driving people, industry and investment out of the state for decades and is trying to manipulate the economy piecemeal, trying to stop more economic destruction with these patchwork tax policies creating inequities while refusing to address the source of the problem. The cause of the problem is the state and those who support the old statist policies, not an industry temporarily not paying higher taxes.
There is no immediate ideal solution to the tax and control problem already entrenched and caused by state policy for decades. Too many in the legislature are still trying to hang onto the old ways of statism and refuse to let go of their power. Because of that these latest targeted tax credits are all that can be done right now. Whether or not they are ultimately for the good depends on whether they are the beginning of fundamental reform or turn out to become entrenched inequities and piecemeal manipulation of the economy forever. With the reactionaries systematically opposing and restricting reform in Augusta one cannot be optimistic.