Maine people and businesses count on our lawmakers to use taxpayer dollars effectively to address current and future challenges and help grow Maine’s economy. This responsibility demands that legislators make the right choices, for example, between adequately funding priorities like education and cutting taxes.

What businesses and Maine people want more than anything else is thriving towns and cities with good schools, skilled workers, reliable public services and a strong sense of community. Fully realizing those goals depends upon taxpayer dollars to fund our schools, police and fire protection, health care for our elders and individuals with disabilities, safe drinking water and a range of other important priorities.

Legislators are currently debating tax conformity, supposedly designed to align Maine’s tax code with changes Congress made to the federal tax code last year. While this sounds like a good idea, the devil is in the details. The proposal from Gov. Paul LePage includes funding for the Maine Capital Investment Credit, or MCIC, a program created as an incentive for businesses to purchase new equipment during the recent recession. While based on federal laws that allow businesses to claim bonus depreciation, MCIC lets businesses depreciate large amounts of their capital expenses in the first year of purchase, speeding up a tax break they would otherwise still receive, just over a longer time period.

Contrary to what its supporters claim, cutting MCIC will not leave Maine small businesses out in the cold. Businesses with capital expenditure of less than $2.5 million can fully depreciate up to $500,000 under another state and federal program, called Section 179, which targets small businesses. Section 179 also enables businesses with annual capital investments between $500,000 and $2 million to claim 50 percent bonus depreciation on any remaining balance. For investments between $2 million and $2.5 million, federal bonus depreciation limits depreciation dollar for dollar. This means that a small business with $2,250,000 in capital expenses can fully depreciate $250,000 through Section 179 and an additional $1 million (50 percent of $2 million) under federal bonus depreciation.

The Maine State Chamber of Commerce and others argue that failure to fund MCIC fully for the next four years will hamstring Maine’s ability to attract and retain businesses and create jobs. It will not. In fact, 31 states chose not to conform to federal bonus depreciation in 2015. The chamber also contends that 4,000 taxpayers stand to benefit from the MCIC. But that’s not the same as 4,000 businesses. Many businesses distribute earnings to many taxpayers who claim the MCIC, so we have no idea how many businesses actually benefit. The Maine Revenue Services fiscal note on the governor’s plan found that corporations, not small businesses, would get 94 percent of the benefit of the MCIC in 2019.

In effect, the governor’s proposal asks small businesses and individual taxpayers to pad the profits of corporations at the risk of placing funding for schools and other priorities in jeopardy. Over the next four years, MRS projects that funding MCIC will cost more than $38 million, and the governor’s proposal does not specify how it will pay for MCIC.

The facts also don’t support the mythical rationale for MCIC and other costly corporate “tax incentives” from the governor, the chamber and their allies that the path to jobs and economic prosperity is paved with tax breaks that will convince large corporations to relocate to the state. As recent research and analysis from the Center on Budget and Policy Priorities shows, the real action for state job growth lies elsewhere. “To create jobs and build strong economies,” CBPP found in its recent paper “State Job Creation Strategies Often Off-Base,” “states should focus on producing more home-grown entrepreneurs and on helping startups and young, fast-growing firms already located in the state to survive and to grow ― not on cutting taxes and trying to lure businesses from other states.”

In addition to supporting home-grown entrepreneurs, Maine will find future jobs and economic growth in sectors of our economy — health care and hospitality — that aren’t going to leave the state for a better deal elsewhere. Rather than wasting taxpayer funds on more discredited corporate tax cuts, Maine’s best bet is to use these funds to support innovation and make it possible for entrepreneurs and workers alike to get the education and skills they need to succeed.

State budgets are about choosing sound priorities, not chasing unicorns. The Maine House has passed a tax conformity bill that repeals the MCIC after tax year 2015 to protect funding for education. The Maine Senate should follow suit.

Garrett Martin is executive director of the Maine Center for Economic Policy.