A bill that would allow tax breaks under the state’s Pine Tree Zone program to be used to encourage development of the Sappi Fine Paper site in Westbrook is on a fast track for consideration by the Legislature.
While Pine Tree Zones are supposed to be used in economically depressed areas of the state, Gov. John Baldacci is backing this exception to help Westbrook and any other community that hosts an industrial site that has lost 500 workers in the last five years.
Rep. Robert Duplessie, D-Westbrook, said the bill is needed in Westbrook even though it is in southern Maine, where the economy is more robust.
The bill would be the second expansion of the Pine Tree Zone program for more prosperous areas proposed to the Legislature this year. A bill that would create a Pine Tree Zone for the Brunswick Naval Air Station and the communities around it is expected to hit the House floor later this week.
Duplessie agreed that some feel southern Maine doesn’t need the tax break help, but he said some businesses only want to be in the populated part of the state.
“There’re reasons why businesses want to come to southern Maine,” he said, including an educated workforce and cultural amenities.
According to testimony given before the Business, Research and Economic Development Committee Monday, several companies already have expressed interest in locating at the Sappi site and could be convinced to make a deal with the tax incentive package.
Under Pine Tree Zones, businesses moving in are eligible for a sales and use tax exemption for construction costs and equipment purchases, as well as a break on income taxes and refunds on corporate income taxes.
Erik Carson, the director of economic and community development in Westbrook, testified the city has used all the economic incentive options available to it locally and needs the state’s help.
“We as municipalities are often reactive instead of proactive because of the limited tools at our discretion,” Carson said in his testimony.
He said the Sappi site has three things manufacturing businesses need: steam production, electricity generation and sewer treatment.
“With this site and these capacities we can create new jobs in a mixed use industrial manufacturing site, as well as provide business retention and the continuation of a sustainable economy for arguably the most important economic sector in the city of Westbrook: manufacturing,” he said.
The bill is being sponsored by Rep. Tim Driscoll, D-Westbrook, on behalf of the governor. He said the Pine Tree Zone tax breaks make sense when there has been a huge job loss, regardless of the site’s location.
“While such a loss of jobs in more economically prosperous areas such as southern Maine might not be as devastating as in other regions, the corresponding loss of that industrial property would be,” he said. “If lost, the ability to create the good paying manufacturing jobs those sites can bring are lost as well.”
Carson said the area has lost 3,000 jobs in the last eight years, including 2,000 at Sappi Paper; 175 with the closure of Sebago Moc and 375 with the closure of Sanmina.
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