A shot at progressive reform

By LANCE TAPLEY  |  December 31, 2012

However, says Republican Senator Katz, "We worked very hard to put those tax cuts in place." He adds, "Personally, I'd be happy to pay more" in taxes, but says legislators should think about the willingness of corporations to invest in a state where they perceive taxes to be high.


The New York Times recently ran an investigative series on tax breaks and grants given out to corporations in each state. Maine came out near the top in per-capita expenditures as well as when they're figured as a portion of the state budget (they're about a fifth of the budget).

Maine spends or loses in tax revenue more than half a billion dollars a year on business "incentive programs," according to the Times — many benefitting giant, out-of-state-based corporations. Justified as job-creation programs, they include sales tax refunds and BETR, the Business Equipment Tax Reimbursement Program, in which the state refunds local property taxes paid by businesses.

The articles made the point that corporations are not held accountable for the number of jobs created. In October, Representative Berry, then the Taxation Committee's lead Democrat, said that, "In many respects, Maine has no idea how its corporate tax breaks are being used, who they are going to—are they creating jobs? And what benefits do other taxpayers get who are shouldering the burden?"

Berry now says that, while "the Democrats have supported certain credits to build our economy," the Legislature can "do better" in giving out tax breaks.

The Democratic Senate majority leader, Seth Goodall, chimes in: "We have to hold every tax dollar accountable." Even Republican Katz, talking of tax breaks, says, "All options are on the table." Woodbury, the independent, an economist, says he'd like to see the issue of tax breaks tackled in the context of comprehensive tax reform.

But it's hard to accomplish comprehensive reform, he adds, without a big public mandate or a governor committed to it. He notes that every tax break "has a constituency that benefits from it."

Yet, with enormous revenue shortfalls looming, if tax breaks aren't reduced or rates raised it's hard to see an alternative to massive human-services budget cuts, since human services are such a big part of the state budget.


Chris Korzen of the group Maine's Majority expresses the hopeful side of the state's liberal activists: "We want full implementation of Obamacare, we want the rich to pay their fair share, we want an economic development plan that starts with local small businesses, and we want an energy policy that favors cost savings through efficiency and is rooted in developing Maine-based energy sources, which will create jobs here at home."

Many progressive bills will be announced. But the legislative process is slow, and few bills of any stripe get passed. Often, even bills with broad support won't pass until the second year of the Legislature.

Moreover, progressive groups like the Maine People's Alliance and the Maine Center for Economic Policy say their top priority will be the budget. Quint, of the MSEA, says, "We're laser-focused on the budget." The union wants to have its members' merit and longevity pay raises "unfrozen" — they have been frozen for almost four years.

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