The Bangor Daily News editorial of April 8 suggests that Maine’s pulp and paper industry, and hence the state of Maine, is at the edge of a precipice. While this may be true, we think the explanations for this crisis differ sharply from the analysis offered by the BDN. Are alleged high business taxes, “greedy” millworkers and stubborn, self-serving unions really responsible for our arrival at this precipice? Closer examination of these issues reveals a vastly different picture.

The editorial first argues that the cost of business in Maine is too high, thus accounting for why companies like Great Northern Paper, Georgia-Pacific and others have not upgraded their facilities. Unfortunately, the continued drumbeat of “high tax burdens” in Maine is based largely on the flawed assertions of the Tax Foundation, whose analyses of tax burdens have been criticized as misleading by both Federal Reserve Chairman Alan Greenspan and by the Center for Budget and Policy Priorities.

In fact, Maine’s corporate taxes as a percent of the state’s General Fund have decreased in recent years (from 6 percent in fiscal year 1998-99 to 50 percent in 2002-03), while individual income taxes have increased (from 44 percent in fiscal year 1998-99 to 50 percent in 2002-03). U.S. Census Bureau data show that in 2000, Maine ranked 18th among the 50 states in corporate income taxes per capita, lower than all other New England states except Vermont and Rhode Island, and only $3 above the national average.

Secondly, the editorial argues that large paper mills should not be expected to pay the vast majority of local property taxes. Why not? If a large paper mill owns a vast complex of land and property with much higher value than the rest of the town’s taxable property, why shouldn’t they pay their fair share of property taxes? As it is, families already pay high individual property taxes in many communities across the state. Large corporations already receive large tax breaks and rebates from municipalities and the state. In many cases they engage in “double dipping” by taking tax breaks twice for the same investments, once in the form of municipal tax increment financing and additionally through the state’s Business and Equipment Tax Refund program of tax breaks for corporate investments in property.

Third, there is the issue of high labor costs. Even if paper mill workers are comparatively well paid compared to many other workers, why shouldn’t they be compensated fairly for working in a highly productive industry and in often dangerous and difficult work? They have produced profits for their employers in return for their wages. The G-P mills have not been losing money and the tissue operation in Old Town has been making a significant profit. If you want good products and high productivity, you hire good, skilled people and you pay them well. Isn’t that the American way? Furthermore, workers in both the Millinocket-area mills and in Old Town have accepted concessionary cuts in recent years. For example, last fall workers at the Old Town mill agreed to a contract with substantial cuts in pay and benefits.

The BDN’s argument about higher labor costs is misleading, however, in suggesting that Maine’s labor costs in the pulp and paper industry are way out of line nationwide. In fact, recent research on comparable pulp and paper labor costs in Maine and 10 other papermaking states for 2002 shows that the average straight-time hourly earnings in Maine are lower than most southern primary paper mills.

Finally, the editorial’s suggestion that the state of Maine should look for “feasible alternatives” to the state’s current economic structure and practices is to be applauded. We need to encourage the development of other industries besides pulp and paper, but we also need to re-examine the practice of bribing large out-of-state corporate employers with more and more tax breaks without accountability. We should make state investments count by making prudent economic development policies that will reward employers who provide adequate wages and benefits and long-term jobs.

This is far better than disbursing state funds through tax expenditures to marginal industries that will generate no new jobs or industries, and to employers who will “take the money and run” rather than invest it for the long-term well-being of the plants, industries, communities and workers in the state. In fact, the state of Maine made substantial investments through the Finance Authority of Maine in the GNP mill in Millinocket only a few years ago, and what did we get in return?

When did it become wrong to offer decent wages and benefits to people who are willing to work hard in demanding and often dangerous jobs? When did it become wrong for people to try to get ahead and do better for themselves and their families? When will we stop blaming workers, who are the victims of globalization and corporate greed, instead of the perpetrators?

John Hanson is the director of the Bureau of Labor Education at the University of Maine.