MEASURE TO STRENGTHEN ECONOMIC INVESTMENT PROGRAM GARNERS BROAD SUPPORT
New Market Tax Credit Program needs cap raised to keep operating
AUGUSTA – A measure that strengthens an existing economic incentive program received broad support from business owners and leaders, financial lenders, and municipal leaders earlier today during a public hearing.
The bill, LD 297, raises the cap for the New Markets Capital Investment Program (NMCI) from $250 million to $500 million in order for the program to continue operating. As of today, roughly 74% or $195 million of investment in six counties has been claimed, so at the current pace, the cap could be reached by the end of the year or soon after.
“This is tax policy that has a positive, concrete impact on job creation. This isn’t a phantom connection to job creation that we can’t measure,” said Democratic State Senator Nate Libby of Lewiston, the bill’s sponsor. “We can look around the state from Washington County to Androscoggin County and witness the businesses and the thousands of jobs this program helped create.”
Established by the Legislature in 2011, the NMCI program is used to attract private investment to businesses operating in economically-distressed areas in the state of Maine. Eligible investors can claim a credit against their state taxes, up to 39% of a project’s total cost. The credit can be claimed for up to $250 million in aggregate statewide investment.
According to Jim Oliver, the Controller for St. Croix Tissue and Woodland Pulp in Baileyville, two new tissue machines are being installed for the first time in a long time as a result of the NMCI program. He added, “This investment would not have happened without Maine’s NMCI program. When the owners were investigating where to site this new facility, one of the key selling points was…our ability to demonstrate that the state of Maine’s economic development incentives were competitive to other states being considered.”
The new tissue machines will preserve 320 jobs currently at the pulp facility; bring 80 direct jobs to the St. Croix Valley and Washington County, an additional 80 jobs in the trucking industry and more than 200 indirect support jobs.
According to economist, Charlie Colgan, for every $1 million of New Markets credit claimed, an estimated $1.56 million will be returned to the state’s general fund. Additional data shows that for every $1 million in credit claimed, an additional $3.43 million in private capital investment was brought to Maine.
The state’s Labor, Commerce, Research and Development Committee (LCRED) will hold a work session on the bill, LD 297, “An Act to Increase Allowed Investments Under the Maine New Markets Capital Investment Program,” in the coming weeks.