PEW RESEARCHER: MAINE TAX BREAKS NEED ACCOUNTABILITY

Greater scrutiny for corporate tax breaks needed to prevent property tax hikes

AUGUSTA —   Maine’s corporate tax breaks are not getting the scrutiny needed to determine their economic benefit to the state, according to a national expert from the non-partisan research institute Pew Charitable Trust.

Jeff Chapman from Pew on Monday delivered the message to Maine’s Tax Expenditure Review Task Force, which is charged with finding $40 million in savings from the state’s billions of dollars in corporate tax breaks. The task force, made up of lawmakers, businesses leaders, and state budget and tax experts,  must find the savings to prevent further cuts to cities, towns, and property taxpayers.

“We simply can’t ask middle class families to pay more in property taxes, while continuing to turn a blind eye to billions in backdoor spending on tax breaks, ” said Rep. Adam Goode, D-Bangor, the House chair of the task force.  “It’s only fair that we know what we are getting for our money and who benefits.”

In a 2012 review of state policies, the Pew Charitable Trusts labeled Maine one of 25 states “trailing behind” in terms of regularly measuring the economic impact of different tax incentives and using that information to inform policy decisions.

Chapman outlined evaluation tools and practices that work well in other states and identified key steps for evaluations for Maine to consider, including sunsetting exemptions, setting timelines for evaluation, and outlining key goals for each tax break.

“We heard clearly that Maine’s tax breaks need to be geared toward strengthening Maine’s economy, growing our middle class, and helping Maine businesses–not just the special interests of a few,” said Senator Anne Haskell, D-Portland, the Senate chair of the task force. “We need to level the playing field because at the end of the day, all Mainers should not shoulder the burden just so a few can benefit.”

While 10 states have laws on the books to provide regular ongoing review of tax breaks, Chapman said Maine was the only state that had a clear choice between raising property taxes or keeping corporate exemptions.

The task force also heard from Beth Ashcroft, who oversees the government oversight Office of Program Evaluation and Government Accountability. Ashcroft laid out areas of the tax code for lawmakers to review, including loopholes which allow corporations to double dip on certain exemptions.

Ashcroft was unable to provide a specific dollar number for the amount of tax breaks given each year, but agreed that it could range anywhere from $1.1. to $6.6. billion depending on which credits, exemptions, and breaks were included in an assessment.

The task force invited the commissioner of the Department of Economic and Community Development to testify. He was unavailable to participate and unwilling to send another staff member.

The tax review task force was created as part of the state budget and will report its recommendations to the Legislature’s Appropriations and Financial Affairs Committee on December 4.

The next meeting of the group is on October 31 will begin with a public comment session at 9 a.m.

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