Business leaders hopeful about new Legislature

AUGUSTA – The issues are not new, but the Legislature is and Maine’s business community is hopeful that new lawmakers being sworn in Dec. 6 will support them on such issues as unemployment and taxes.

“I think they are all reading the newspapers, and they know we have problems that the people want solved,” said David Clough, Maine director of the National Federation of Independent Businesses. “My sense is that the Legislature is not going to be antagonistic towards business.”

Chris Hall, executive vice president of the Maine Chamber of Commerce, said it is very difficult to know how a lot of the new lawmakers will vote on various issues until the Legislature gets under way with hearings and committee discussions of legislation.

“In the House you have a very strong Democratic majority, and we heard in the campaign, as well as recently in some of the caucus speeches, that they support a stronger economy,” he said. “This is a great opportunity for them to show the people of Maine they can do what they have been saying they want to do.”

Jim McGregor, vice president of the Maine Merchants Association, agreed that many Democrats talked during the campaign and in legislative organizational meetings about the same issues the business community has been concerned with. He said the political trend this year is not crystal clear. He said while the House went strongly Democratic, the Senate tightened up, with the GOP gaining a seat.

“I think it will be the same as we have seen in the past,” he said. “On some issues you will see members of both parties crossing over and not following the leaders’ light. We saw that on [the] minimum wage, where some Democrats voted against it, but then some Republicans voted for it.”

One set of issues that will be before lawmakers concerns the state’s unemployment system. Ed Gorham, president of the Maine AFL-CIO, said there will not only be a battle over extending the part-time benefits program, which is scheduled to “sunset,” or end, in 2007, but the labor movement will push for other benefit changes in the unemployment program to help workers who have lost their jobs.

“When we made the concessions we made six years ago to go to a new financing system and put the health of the trust fund first, we told them then we would be coming back for new benefits when the fund was healthy,” he said. “It’s healthy.”

That union groups will push for new or expanded benefits does not surprise business advocates.

“There are a number of groups who see the unemployment insurance trust fund as some sort of piggybank they can raid periodically,” Clough said. “It should be used as it was designed to be used – to provide a safety net to workers when they are laid off.”

The perennial battle over the personal property tax on businesses also is expected to re-emerge as an issue in the coming session. Retailers are still fuming over being excluded from the repeal last session of the personal property tax on business equipment.

Under the law that was adopted, a large manufacturer will see its property tax phased out, but retailers will continue to need to request reimbursement from the state under the state’s business equipment tax reimbursement program, or BETR. The retailers argue that will mean they will still have to fight every budget cycle to ensure the program is adequately funded.

“Some people did not want to give a tax benefit to so-called big box stores,” Clough said. “But in their effort to punish the big box stores, they are also punishing mom and pop stores, Main Street small businesses.”

He said it is very different to have property exempt from taxation instead of getting reimbursed for the tax, especially since funding for the program remains in competition with all the other spending requests before the Legislature.

“There is still going to be a lot of attention on the BETR program,” said Hall of the Maine Chamber of Commerce. “Remember, even though new equipment will be exempt from the property tax, existing equipment will continue to be taxed and businesses will seek reimbursement through the BETR program.”

McGregor of the Maine Merchants Association said retailers were blocked from getting the tax exemption because they are becoming so important to the property tax base of many cities and towns.

“It didn’t take [lawmakers] very long to figure there are more retailers in their towns these days than paper companies,” he said.

McGregor said the business community was split on the issue in the last session, and that could pose problems in the new session. He said his members are frustrated that the importance of retailing to Maine’s economy continues to get shortchanged.

“We will be fighting to explain the importance of retailing and why it should be treated like other businesses in our state,” he said.

Clough said he expects the business community to be unified in its efforts to fund the BETR program this year, but it will not be easy with all the other competing demands on state funds.