AUGUSTA, Maine — Maine Revenue Services has submitted a report to the Legislature on several of the business tax breaks on the books, but leaders of the Taxation Committee say the compilation of how much revenue was lost in providing the breaks falls short. They want a measure of how effective the breaks are in keeping or adding jobs.
“That’s not what we were asked to do,” said Mike Allen, associate commissioner for tax policy. He said Maine Revenue Services was asked to provide data on what the breaks cost, not the effectiveness of the tax breaks.
The report covers four tax credits and the Business Property Tax Reimbursement, or BETR, program. The credits are the Jobs and Investment Tax Credit, the Research Expense Tax Credit, the Seed Capital Investment Tax Credit and the Shipbuilders Tax Credit.
“The report has the number of taxpayers that claimed the credit and the dollar amount,” he said. “We are not geared up to do a job analysis beyond the minimum set out in the law, if there is one.”
For example, the Jobs and Investment Tax Credit was used by just one employer, and their identity is protected by law. That business got a credit of $489,986. Under the minimum required to qualify for the credit, the business had to create at least 100 new jobs.
Rep. Gary Knight, R-Livermore Falls, is the co-chairman of the Taxation Committee. He is concerned that only one company used the credit and that the credit should be reviewed as part of a process to evaluate all business tax credits.
“We had started down the road of doing a review of all of the tax credits to see how effective they are,” he said. “That didn’t happen but it should.”
Knight said in addition to the tax credits covered by this report to lawmakers, a report in January will list all of the state’s tax expenditures. Those are items that are currently exempt from state taxes, including sales taxes and income taxes.
“We spend more in tax expenditures every year than we spend in the entire state budget,” said Rep. Seth Berry, D-Bowdoinham, the lead Democrat on the committee. He said more time should be spent reviewing whether all of those tax breaks are warranted.
“We have discussed, in a bipartisan way, looking at all tax breaks to make sure they are resulting in new jobs or keeping jobs,” Knight said.
An example of keeping jobs is the Shipbuilding Tax Credit, which is available to any ship builder that employs at least 3,500 workers, with health insurance and retirement benefits for the workers. Bath Iron Works is the only facility that qualifies for the credit.
The report indicates in 2011 the facility had 5,173 workers and has invested $333 million in the facility since the break first took effect in 1997. The tax break could be for as much as $3.5 million a year.
Berry said some of the credits in the current report may meet the goal of creating or saving jobs, but no one can be certain on most of them.
“Maine has no idea how its corporate tax breaks are being used, who they are going to, are they creating jobs,” he said. “And what benefits do other taxpayers get who are shouldering the burden?”
Berry said whenever a tax break is granted of any nature; it means that other taxpayers will have to pay a little more in taxes.
Both Knight and Berry said the largest of the tax breaks in the revenue service report is for the BETR program. The program reimburses some businesses for property taxes paid on qualified property.
“There is no jobs measure for that substantial expenditure,” Knight said. “I know there are concerns about trade secrets and confidential business information, but there must be some way we can get a measure of what this means for jobs in Maine.”
The report lists every business that filed for the program during the budget year ending June 30, 2012. Approximately 1,800 companies were reimbursed over $52.7 million.
“We may be subsidizing large, out-of-state corporations at the expense of Maine’s middle class, and we don’t know if that is creating any jobs,” Berry said.
Six of the top 10 BETR recipients have their corporate headquarters located outside of Maine.
Both Knight and Berry say if they are re-elected, they will work to make sure business tax breaks are reviewed by lawmakers to see if they are still warranted.
And the lard can is attacking the poor for needing a few cents.
Because he’s an incompetent idealogue.
How does Obama fit into this discussion?
Why would you pretend that the term “lard can” might refer to our very lean and fit president?
Get some Psychiatric help!
Obama isn’t the Maine Revenue Assasin!
Oh, a comedian, eh?
At least Obama can fit into his clothes.
We owned a small business in Maine and never received any of these tax credits. To the contrary Maine taxed us right out of the state. All our employees left Maine, too. Taxes are WAY too high there and what do you get for those taxes in Bangor in particular? An inept city council that brought drug addicts and sex offenders to town. Three Methodone clinics AND Bangor is the Sex Offender Capital of Maine.
Really sour grapes, huh?
Objecting to one’s own destruction is not what “sour grapes” means.
Most of these credits go to the big guys the ones who can afford lobbyist to advocate legislation for them.
“The report lists every business that filed for the program during the
budget year ending June 30, 2012. Approximately 1,800 companies were
reimbursed over $52.7 million.” There are 43,000 busineses in Maine –most get nada.
don’t forget we now have a casino to boot
I wonder how many lawmakers have access or own or work for all the tax break companies.Another fine example of the fox watching the hen house.matter of fact in this case the fox is running the hen house
Here’s where to look:
http://www.maine.gov/ethics/disclosure/2010soi.htm
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In particular I’d be interested in how many of Gary Knight’s business associates are getting this corporate welfare.
http://www.maine.gov/ethics/pdf/soi/2010/house/KNIGHT.pdf
Wassup Tyke ???? This our new home ???
For now. btw I comment on other sites with Disqus too. One good one: http://politicalwire.com/
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Gary Knight is a banker and he fought tooth and nail to defeat the bill that would have required a bank to simply attest to the fact that they had documents to show they actually owned a mortgage before they could foreclose and evict a homeowner. The bank didn’t even have to produce the paperwork – just sign a statement saying that they did in fact have it.
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I’d love to see Knight defeated but I’m not in his district and don’t know what the odds are.
YUP
Gary Knight for Governor.
Why would you support someone who dropped the ball so utterly and completely? He wasn’t bright enough to request a study that would give any meaningful data.
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He now says if he is reelected he’ll begin to look into these sweet giveaways of corporate welfare. He’s been there 4 years already – what has he been doing all of this time?
Well He is not perfect . His vote against LD1833 sold me. The bill might not have passed and had good points to it. But was not designed to do what it was supposed unless the goal is to lower wages.
His intense lobbying to destroy a bill that would have required banks to simply sign a form simply attesting to the fact that they had the paperwork required to prove they owned a mortgage before they could foreclose and evict homeowners convinced me that he is sleazy, anti middle class and owned by the big banks.
“Not perfect” is the least of it. He appears to be favoring his cohorts in MRS by giving them more ambiguous, discretionary powers that they use to hurt people.
I am really wondering if the Legislature wrote into any of those bills that the Revenue Service had to do those studies. I really doubt it, but I could be wrong. Anyone have any idea?
Check out the OPEGA report from 6 years ago. These programs are $200 million per year giveaways with almost no requirements from the businesses and little to no oversight. If Gary Knight didn’t already know this he is simply not qualified to be a member of the taxation committee, let alone chair!
http://www.maine.gov/legis/opega/reports/Economic%20Development%20Programs%202006/EcDev%20-%20Final%20Report.pdf
You are correct. But I still don’t think the reporting was built in to the original bill.
OPEGA ‘s review reccommended the legislature give the programs a more thourough review .
A few years ago OPEGA( Office of Program Evaluation and Government Accountability) reviewed all the tax subsidy and reccommended the legislature do a more in depth review. Looks like they are just getting to it .
There is a lot of tweaking to be done with our Maine tax code and the first place is to look into the tax exempt churches. And any other tax breaks that the regular Maine citizen is not afforded. Lets spread the burden Maine lawmakers.
like BETR, shipbuilder tax credit, etc OPEGA, who did a review of business tax credit and subsidy programs, reccommendend a more thorough assessment of the laws several years ago . Nothing was done .
Tax breaks should be tied to jobs you create x number of jobs you get a tax break. Now you go below on a certain of people you have working you lose your tax break .
People don’t live in order to “give jobs” to others and should not be
subjected to punitive taxation for not doing so in accordance with government demands.
If the taxpayers of Maine give a tax break to a company to create jobs and they fail to do so they should be severely penalized.
Have no worry. MRS will penalize anyone it thinks isn’t following its interpretation of the law. But not taxing someone as much as they otherwise would be on a theory that taxes should be used as a tool to manipulate people into “giving jobs” is wrong, and not following government fantasies is no crime. The money belongs to the people it is taken from, not the state.
BUT they were “approved” and sold to the legislature with the INTENT of creating jobs. If they aren’t then get rid of them. It’s called accountability. OPEGA reviewed these business taxes and said many had NO acountability, were duplicatuve and at high risk of fraud and abusue. it’s like a kid let loose in a candy store .
The legislature should not be trying to control the economy by manipulating business with taxes at all. Taxes should be lower because they are harming private individuals and their businesses. Republicans should not be following leftist slogans by trying to justify lower taxes as ‘providing jobs’. No one has a duty to give people jobs and should not be punished with taxes for not doing so. That is not “accountability”.
For prettyfoolish below:
Subsidies, not legitimate deductions for legitimate business expenses and depreciation, should be eliminated and all tax rates reduced. Raising someones taxes is not a “revenue savings” available for more spending; it belongs to the people paying the taxes and should be returned to them through lower overall taxes.
good then we agree eliminate all business tax subsidies . And put the revenue savings into education etc.
The purported purpose of taxpayer paid business subsidy is to actually create jobs to benefit taxpayers.That is how they “sell ” it to the legislature. If they aren”t working as intended, they should be eliminated . They are not getting punitive taxation but preferential taxation.
““We spend more in tax expenditures every year than we spend in the entire state budget,”
“Maine has no idea how its corporate tax breaks are being used, who they
are going to, are they creating jobs,” he said. “And what benefits do
other taxpayers get who are shouldering the burden?”
Berry said whenever a tax break is granted of any nature; it means that other taxpayers will have to pay a little more in taxes.
There is no such thing as a “tax expenditure”. It is not the state’s money to “spend”. The cause of higher taxes on others is the state, not those who are not paying more than they already are.
High taxes hurt the economy and therefore jobs. That does not mean that the state should be trying to manipulate the economy with inequitable taxes.
For prettyfoolish below:
They can say anything they want, including blaming other people for taxes because they don’t pay more than they already do, but it isn’t true; they are responsible for imposing the taxes.
“Berry said whenever a tax break is granted of any nature; it means that other taxpayers will have to pay a little more in taxes.”
Thats how BIW got there tax break that they had to keep x number of people working if not they would of had to pay all that money back i know i worked for BIW at that time .
Ironically, the legislators call a tax break an “expenditure”. To the citizens and businesses of Maine if they doubled our taxes, that would be a gigantic expenditure to us. If they gave us a tax break and reduced our taxes to half, to us that would be a SAVINGS.
This means the legislators are viewing taxes from the side of the hungry government machine gnawing away at our resources, not from the side of the citizens and the business which they represent!
Well maybe cut some of the wages in the Augusta Whitehouse.
So two of the four tax breaks these people looked at are specific to only one company each. Way to go, legislature. I’d be curious to know who’s related to whom between those companies and the legislature.
..
These tax politicians are very confused.
A lack of more taxes that the state is not presently authorized to collect is not an “expenditure”. The money belongs to the people they take it from. There is no such thing as a “tax expenditure” due to a lack of some tax. Yet MRS has been issuing these “reports” on what it regards as “tax expenditures” for years. The LePage administration is supposed to be reforming this agency, not encouraging its statism.
Nor is the purpose of taxes supposed to be to manipulate the economy for “jobs” or anything else. Maine’s high taxes are denounced for wrecking the economy, which in turn destroys jobs. The solution is to lower the taxes and allow a free economy, not further manipulate them for coercive state direction of the economy to “create jobs” or anything else. Jobs, like any form of trade, are the consequence of a private, productive economy in which people are free to produce and exchange the results with others. The state does not create jobs, it only punishes, subsidizes and distorts. The state is not supposed to be coercively manipulating and distorting the economy through punishments and rewards for businesses in accordance with what state planners want.
Tax “credits”, as opposed to tax deductions for expenses or the absence of a tax not authorized, are subsidies that should not exist. They arise because a high tax economy is so distorted that some businesses cannot survive under uniform tax rates because different people in different activities are affected differently. Lower the taxes, cut spending, and get the state out of meddling to manipulate the economy.
A statist government which pretends that it respects private property while controlling and manipulating it and the people who own it is the form of socialism called fascism. It’s socialism for business, run by and far the crony fascists pulling the strings.
Along with high, inequitable taxes imposed manipulation is the direct bullying and threats used by MRS to push people around and punish those they resent. Both the high taxes and the discretionary, non-objective laws empowering bureaucrats to trample civil rights must go. Both these aspects of Maine’s tax system are the hallmark of fascism and do not belong here. If the Republicans continue to do nothing about this fundamental problem that has been progressively growing for decades, then they will have failed as typical “me too but slower” Republicans.
This is an example of what LePage’s temper tantrum’s caused. That it took him threatening the State Budget last year is all the more sad. But the FACT that both Party’s are now acknowledging the FACT that the tax break’s and credit’s are feeding Out of State Corporations and Company’s NOT MAINE BASED. is one of the best pieces of news that the voter’s could have gotten. That the 2 Party’s have also gotten this far also says that there are gonna be A LOT of changes coming in January, based on reality, not political whining and crying and theatric’s, that are going to be based on what’s best for the voter’s not jusr certain Special Interest Group’s. Maine small business’s need these tax credit’s for any number of reason’s. But to let them be used to aviod tax’s under the guise of bringing or creating job’s is not what the doctor ordered. If the MRS can ever do what it’s told, not what it want’s to do, then the Legislature might finally get the answer’s it needs to make a responsible decision and act. That alone would be a huge improvement in Maine State Government actually working, not just running amok like a rabid animal.
So let me get this straight…if you work in a publically funded job, your salary and benefit package is public information, there for the world to see. But if you get a $489,986.00 tax credit, (and you’re a business) then you identity is protected by law. Come on…give me a break! It’s time we turn some of those clowns in the legislature out to pasture!!!
Private financial records are none of your business. Publicly funded jobs are the business of every taxpayer.
Don’t care about seeing the private financial records, but if we are gonna to give a $489,986.00 tax break to a corporation that will have to be made up from tax payer $ we ought to have the right to know who’s gettin’ it!
Taxes are not an excuse to know anything about someone else’s finances, including anything about their tax returns. Someone’s not paying more in taxes is not a “cost” to government and not “made up” by others. The money not paid is their’s, not the government’s and not “other taxpayers'”. “We” are not “giving” anything to someone who isn’t paying more in taxes. The responsibility of imposing what “others” pay is the government’s, not those who aren’t made to pay more. The tax rates and Byzantine maze of regulations and inequities are public knowledge and all that is required to know to reform it.
Can’t argue with that logic.
Feeding at the trough. It’s time for a crackdown.
So tax breaks don’t create jobs?
Who knew?
everyone BUT the foolish legislators who approve these things –all favor for friends, like .
“For example, the Jobs and Investment Tax Credit was used by just one
employer, and their identity is protected by law. That business got a
credit of $489,986. Under the minimum required to qualify for the
credit, the business had to create at least 100 new jobs.” $49,000 per job!!!
and…“There is no jobs measure for that substantial expenditure,” Knight
said. “I know there are concerns about trade secrets and confidential
business information, but there must be some way we can get a measure of
what this means for jobs in Maine.”
The report lists every business that filed for the program during the
budget year ending June 30, 2012. Approximately 1,800 companies were
reimbursed over $52.7 million.
“We may be subsidizing large, out-of-state corporations at the
expense of Maine’s middle class, and we don’t know if that is creating
any jobs,” Berry said.
Six of the top 10 BETR recipients have their corporate headquarters located outside of Maine.”
Often these programs result in a NET JOB LOSES. Better equipment means fewer workers.
They give these tax breaks and the poor has to pay for it.. The rich get tax breaks and they pay only 14% the poor guy pays 20% and up.. They are supposed to be creating jobs with these tax breaks and they aren’t.. With unemployment this high they can’t be creating jobs they are just hoarding the money.. If they gave a poor guy these kind of tax breaks and said you have to create jobs or lose it they would be all over this guy.. The feds as well as the penguins office.. The penguin is probably getting tax breaks and he isn’t creating jobs, oh yeah that’s right look at his daughter..
Quit your job and you can’t afford to pay the mortgage!
Huh!
Who would have thought?