Tax expenditures should receive the same scrutiny as all state spending does. That belief is what spurred the creation of a legislative task force charged with finding $40 million in savings from the state’s $1 billion in tax breaks. The group must find the savings from corporate tax breaks to prevent further cuts to cities and towns and higher property tax bills for local taxpayers. Unfortunately, this group already has been the target of negative attacks from the right.
For a party that touts its belief in balancing the budget, Republicans should welcome the work of a task force aimed at finding inefficient spending in the state’s tax code. In recent years, my Republican colleagues have been complicit in cutting programs such as Head Start or Meals on Wheels that serve Maine families, children and seniors.
It only makes sense that both parties should apply the same level of scrutiny to corporate loopholes and special-interest tax breaks. Year after year, Mainers find Head Start, prescription coverage for the elderly and Meals on Wheels on the chopping block, while a blind eye is turned to a faulty tax code that doesn’t work for the vast majority of Maine businesses and working families.
It is unfair to make hard-working families cope with property tax increases, while resisting any attempt to develop a tax code that’s fair and works better for our state’s economy.
Maine needs accountability when it comes to backdoor spending. Maine workers and small businesses should be benefitting from a fair tax system that levels the playing field and ensures good jobs and economic growth for the middle class.
For the past 50 years, Maine has continued to pile on tax breaks for businesses without any detailed assessment of their effectiveness. We know that subsidies to seven corporations account for $20 million of Maine’s backdoor spending. Maine has no mechanism for determining if it receives any return on investment for these breaks and exemptions. Every year, investments in health care, education, transportation and infrastructure are scrutinized and evaluated. Every year, we turn a blind eye to hundreds of tax loopholes and backdoor spending.
In a 2012 review of state policies, the Pew Charitable Trusts labeled Maine as “trailing behind” when it came to regularly measuring the economic impact of its tax incentives. The review also concluded that when Maine does conduct these measurements, the results are rarely used to affect policymaking decisions.
Good Jobs First, a national, non-partisan organization that tracks economic development subsidies in all 50 states, ranks Maine in the bottom half of states for transparency and accountability in economic development subsidies.
We can’t ask working families to continue to pay for ineffective tax breaks that don’t help Maine’s economy. That’s why it is so important that this task force succeed in finding savings from these tax breaks by rescinding them if they aren’t working. If they are not helping Maine’s economy, property taxpayers shouldn’t pay for them.
Gov. Paul LePage is a proponent of zero-based budgeting, a process by which all expenses must be justified each time a state budget is created. If the governor and Republicans insist on a zero-based approach for state programs, they also should agree with a zero-based approach when it comes to justifying the tax breaks.
More than anything, modernizing the tax code ensures that Maine covers all its bases when it comes to using its resources more efficiently. We can’t do that without taking a hard look at backdoor spending and corporate tax breaks.
Rep. Adam Goode, D-Bangor, is House chairman of the Tax Expenditure Tax Force and the Taxation Committee.