Steven Levesque, commissioner of the Department of Economic and Community Development, says he intends to do what few leaders here have managed in recent decades. He wants to take a hodge-podge of popular state programs, reduce their number, stop them from overlapping and make them more easily understandable to the average person. It is a plan that has been needed for years.
Maine has three dozen separate business incentive and assistance programs. They have accumulated over the years as their need arose, in meandering fashion, sometimes without consideration for what already esisted. No doubt all of them were created with good intentions. But when advisors to businesses thinking about relocating were in Maine earlier this summer, they took one look at these programs and said, Nice range. The right blend of generosity and quality standards. Way too confusing.
Confusing was the prime adjective during the last legislative session when lawmakers tried to get a handle on the blossoming incentive, the Business Equipment Property Tax Reimbursement Program (BETR). The uncertainty of whether businesses that were taking advantage of this program also cashed in on several others made detractors of BETR overly aggressive and proponents overly defensive. BETR was either an insatiable surplus-gobbler with nothing to show for it or a major reason for Maine’s growing economy. The simpler set of initiatives advocated by Commissioner Levesque would take a lot of the guesswork out of this debate and probably eliminate the more extreme positions.
Maine would not be the first state to untangle its incentives from the rhetoric that introduced them. Minnesota, for instance, presents its lawmakers with updates every two years on the effects of tax changes. Texas requires impact statements and a method for measuring results with every tax proposal submitted.
The commissioner hopes to revamp Maine’s business incentives with the help of the new Economic Development Incentive Commission, which is charged with making sense of all these programs and reporting on them to the public. He wants to reduce the 36 programs to five or seven, broadening them to include the same features as currently exist, but getting rid of the overlap and the need for businesses to hire accountants to figure out whether they qualify, for instance, for the High Technology Investment Tax Credit, the Super R&D Credit or both.
Overhauling these programs would have at least two beneficial effects: It would enable any business owner to know quickly whether he or she could take advantage of a program and it would allow the public to better understand where these incentives were going and why. The programs are important to mature industries trying to remain profitable and startups trying to grow. Lawmakers from both parties have every reason to support the commissioner in this effort.
And if this reform works out, the next job for the DECD commissioner is to make sense of the rest of the state tax system.
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