Corporations routinely ask the Legislature for big tax breaks, such as the $45 million legislators gave Bath Iron Works in 2018. Instead of paying taxes, businesses pledge to contribute in other ways — usually by creating jobs or making capital investments they claim will benefit Mainers.

Workers at BIW say the company’s hiring and wage practices contradict the pledges it made when it received the tax credit. They brought those questions to the presiding officers of the Legislature, who sent a letter to BIW to look into the workers’ claims.

According to analyses by the Legislature and others, there’s little evidence that these sorts of tax expenditures spur job creation or investment. More often than not, they subsidize activity that was already planned. At worst, they leave taxpayers holding the bag as corporations fail to deliver on promises made, such as when Cate Street Capital walked away with $16 million in cash without investing a cent in the state.

The evidence suggests that instead of giving millions to profitable corporations, Maine could better spend that money on public investments that truly benefit communities and the economy — such as education, health care, infrastructure, and clean air and water.

But as long as these tax breaks are on the books, the least we should expect is a good-faith, proactive effort at accountability. That means asking questions, as the presiding officers did. And yes, it means considering repeal of tax credits when corporations aren’t living up to their promises.

 

Garrett Martin

executive director

Maine Center for Economic Policy


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