This bill is about fiscal responsibility and ensuring that public dollars are spent wisely. It would bring transparency, accountability, and enforcement mechanisms to four large economic development incentive programs: the Seed Capital Investment Tax Credit, Pine Tree Development Zone Tax Credits, the New Markets Capital Investment Credit, and Employment Tax Increment Financing.
Good Afternoon Senator McCormick, Representative Goode, and members of Joint Standing Committee on Taxation. I’m Joel Johnson, an economist working at the Maine Center for Economic Policy. I’m here today to testify in support of LD 1287.
This bill is about fiscal responsibility and ensuring that public dollars are spent wisely. It would bring transparency, accountability, and enforcement mechanisms to four large economic development incentive programs: the Seed Capital Investment Tax Credit, Pine Tree Development Zone Tax Credits, the New Markets Capital Investment Credit, and Employment Tax Increment Financing.
Tax expenditures—especially economic development incentives—deserve the same level of scrutiny and review that all government programs receive to determine their cost effectiveness. The Maine Tax Expenditure Report published earlier this year by the Maine Revenue Services Office of Tax Policy Research projects that these four programs will provide more than $30 million of incentives to businesses in Fiscal Year 2017.
A 2014 report commissioned by the Maine Department of Economic and Community Development (DECD), entitled “Comprehensive Evaluation of Maine’s Economic Development Incentive Programs,” recommended similar changes to the state’s system of economic development standards. It recommended more transparency and access to information about companies receiving subsidies and tax breaks from these programs and more evaluation and monitoring of the success of these programs promoting investment and quality employment opportunities.
