Radio Address — Sen. Diamond: It's time to rethink economic development, job creation
Every year, our state’s taxpayers foot the bill for a $12 million program designed to promote economic activity in struggling communities and the creation of good-paying jobs. But a new report by an independent, nonpartisan state agency raised some concerns about the program.
Hi, I’m Senator Bill Diamond from Windham. Thanks for listening.
The program in question seeks to boost the fortunes of these “Pine Tree Development Zones” by giving various tax breaks to companies located within them — from income tax credits to sales tax exemptions and more, so that they will hire Mainers and invest in their communities. These tax breaks undoubtedly help the companies’ bottom lines, which isn’t a bad thing. However we need to make sure the program is functioning as intended.
That’s the conclusion of an initial report commissioned by the Government Oversight Committee, on which I serve. The report raised serious questions about the program’s design and indicated that it does not’ support the program’s goals.
For example, the report showed that a company can receive two years of some of the benefits before it creates a single additional job. Even if it does create a new job, there’s no way to tell whether the job would have been created even without the tax breaks.
Moreover, due to legislative changes, businesses anywhere in Maine, even in communities that are prospering, can now obtain benefits. We want all Maine businesses to prosper. However, if the goal of this program is to focus on towns and cities struggling to create and keep new jobs than we need to make some changes.
Supporting Maine’s economy, and with it the prosperity of Mainers, is one of my top goals in the Legislature. The Pine Tree Zone program has a noble purpose, and one we should still pursue. Recovery in areas of our state that have high unemployment or low wages must be a priority.
Economic development is complicated. There are never any guarantees. But the concerns raised by the state’s nonpartisan research agency mandates that we identify the potential problem areas and either fix them or create a new program that attracts businesses and brings new jobs to Maine.
Under current law, businesses will no longer be eligible to apply for benefits under the Pine Tree Development Zone program after next year. The Legislature must decide whether to extend the program or allow it to expire.
We cannot continue to fund this program if the concerns raised are valid. State-level economic development programs must be focused on results. So we must either overhaul the program, or come up with a more suitable alternative to meet our shared goals of strong employment, good wages and sustained economic growth.
This is Senator Bill Diamond, of Windham. Thanks for tuning in.