In his State of the State address Tuesday, Gov. King acknowledged with commendable candor that Maine is a poor state; more precisely, a hard-working poor state. Further, it was clear that the governor recognizes that Maine’s most pressing problems – such as high tax burden, lagging college attainment and out-migration of its young – can be traced directly to the prevalence of low-paying jobs.

In his budget proposal, the governor makes another important acknowledgment – the reason the state assists business is so business can produce good-paying jobs. Though not stated directly, that is at the core of his proposal to reform BETR, the Business Equipment Tax Reimbursement program.

BETR, a favorite of Gov. King and of the business community, does precisely what the name says – the state reimburses businesses for the property taxes they pay to their municipalities on the equipment they buy. The municipalities still get this important source of revenue, residential property taxpayers get a little relief, businesses get their money back and, in theory, a business-friendlier Maine gets good jobs.

In reality, a definite link between BETR and good jobs has not been established, but the galloping expense of the program is undeniable. BETR began in 1995 with an appropriation of just $5 million. Its cost this fiscal year will approach $60 million and it will exceed $70 million within the next two.

Since the cost of BETR began to explode two years ago, there have been several proposals to create such a link, but the governor and the business community have objected, saying the economic issues underlying job creation and retention are too complex for a simple cost-benefit formula.

Now, however, Gov. King suggests limiting participation to companies engaged in manufacturing and research and to service and retail businesses that do most of their business out of state. Service and retail businesses that rely upon customers coming through the door – that is, in-state – would be shut out.

Tying BETR to specific types of businesses is a move in the right direction, but the governor has chosen a roundabout route. The tie should be between BETR and the types of businesses that create good-paying jobs with benefits, regardless of where the customers are. Given the difficulties Maine’s geography and limited transportation infrastructure present, the governor’s proposal concentrates BETR participation on telemarketers, paper mills and businesses along that narrow I-95 corridor. The real crisis in Maine’s economy is not along that corridor, however. It is in the far-flung rural communities, where new or expanding businesses are desperately needed and where good pay and benefits are crucial to survival. Still, it’s good that the governor has broached the issue of connecting business assistance to business performance.

A better connection, though, is offered by Sen. Peter Mills, who rightly sees BETR in its present form as ”unsustainable.” The Skowhegan Republican, one of the Legislature’s most knowledgeable members on taxation issues, is proposing a comprehensive “Tax Code Rebalance Bill” that includes BETR reform with a performance standard for participating businesses. The standard is clear and, just as importantly, it takes into account the state’s existing economic and geographic disparities – a business seeking BETR funds must pay at least 95 percent of its employees an hourly wage and benefits package that exceeds the average for that county. BETR businesses, in other words, must be measurably better.

Another element of the governor’s BETR reform would put the program into a special revenue fund category for budget purposes, removing it from the biennial General Fund fray. This would, supporters say, eliminate the uncertainty surrounding the program and provide businesses with the kind of guarantee they need to make investments. It’s a good idea, this guarantee. Just so the taxpayers get one, too.