BRUNSWICK — Gov. Paul LePage outlined legislation Monday to create “Open for Business Zones,” which he says would attract major employers by providing generous tax incentives and exempting them from collective bargaining requirements – a proposal that already is drawing criticism from labor unions.
During a news conference at the Maine Technology Institute at Brunswick Landing, the governor said Maine needs a competitive edge. “Investment capital goes where it’s welcomed and stays where it’s appreciated,” he said.
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LePage’s proposal, which he mentioned during his State of the State address last month, would put Maine on a level playing field with other states, he said. The major components would provide a 100 percent corporate tax credit for the first 10 years and a 50 percent credit for the next 10; offer sales tax exemptions and reimbursements for as long as 20 years; and offer annual reimbursement to businesses under the Regional Greenhouse Gas Initiative Trust Fund to lower energy costs.
Wherever a company decided to locate would become the Open for Business Zone where the incentives would be offered. Companies that invested more than $50 million and created at least 1,500 jobs would be eligible.
The most controversial piece of LePage’s proposal calls for “right-to-work zones,” where companies would be exempt from collective bargaining requirements.
Asked whether he would support legislation without the right-to-work piece, LePage said, “That’s what (companies) want.”
The governor said states that have recently attracted large businesses are all right-to-work states. He said Maine is not ready to be a full right-to-work state yet – as shown by the rejection of two bills proposing it in the last three years, including one that was rejected by a Republican-controlled Legislature – but his bill could be a pilot project to show Mainers that it works.
Sen. Andre Cushing, R-Hampden, will sponsor the bill for the governor. He said the concept “bridges a partisan divide,” and everyone should want the state to compete for major employers.
The bill includes a provision, called Maine Preference, that would give preference, whenever possible, to Maine workers, companies and bidders for supplies and subcontracting, something that could attract bipartisan support.
“We desperately need to replace some of the manufacturers that have left,” Cushing said.
‘RIGHT TO WORK’ PLAN OPPOSED
The bill will be introduced in the coming weeks, but Democrats, who have majorities in the House and Senate, already oppose it.
“The question we have to ask is, why does Governor LePage want to lower the wages of Maine people?” said Sen. Stan Gerzofsky, D-Brunswick. “The governor may call this right to work, but I call it right to work for less. All this does is allow CEOs the right to pay workers less and deny them access to health care and retirement.”
Maine’s unions are equally critical of the legislation.
“This is another divisive political stunt from Governor LePage,” Maine AFL-CIO President Don Berry said in a prepared statement. “ ‘Right to Work’ isn’t what it seems. It’s a ploy to make it easier to move workers into part time positions, weaken health and safety protections and pay people less.”
AFL-CIO Executive Director Matt Schlobohm has suggested that the governor’s proposal is unconstitutional.
Asked about that claim Monday, LePage said, “If it’s unconstitutional, then he has a process to prove that and certainly I’m not going to step in the way. Let him prove it.”
Even if the proposal dies in the Legislature, LePage likely will use it in this year’s re-election campaign. His two opponents, Democratic U.S. Rep. Mike Michaud and independent Eliot Cutler, both oppose the idea.
INCENTIVES AIM FOR BIG RESULTS
LePage said Monday that he’s proud of his administration’s economic accomplishments since he took office in January 2011, citing 13,000 new private-sector jobs, a five-year low in the state’s unemployment rate and a workers’ compensation rate that is the lowest in two decades. But he said the state needs to do more to attract major businesses that have the 1,500 jobs needed to qualify for his proposed incentives.
In 2013, Maine had 13 companies with more than 1,500 workers, according to a list of the top private employers compiled by the state Department of Labor. The top two are retailers – Hannaford and Walmart – whose employees are spread all over the state. Also on the list is the Shaw’s supermarket chain. Five of the largest employers are hospitals.
The only companies on the list that would fit the definition of manufacturing – the type of business the governor wants to attract – are Bath Iron Works, a shipbuilder that relies mostly on government contracts, and Verso Paper, a paper company that will get even bigger if it acquires NewPage Holdings in a $1.4 billion deal that was announced in January.
IS THERE OUT-OF-STATE INTEREST?
It’s not clear how much interest major companies have in settling in Maine. A recent report by the Brookings Institution said that 95 percent of all job gains annually in an average state come from within, as existing businesses expand and entrepreneurs create businesses.
Asked Monday whether he is negotiating with any out-of-state businesses, LePage did not answer directly.
“There are a couple opportunities we’re exploring,” he said, without elaborating. “I would say it’s quite a distant potential.”
In 2012, the Portland Press Herald reported that the governor’s economic development team was working with the Midcoast Regional Redevelopment Authority in Brunswick to recruit Bombardier Inc., a Canada-based company with facilities throughout North America, Asia and Europe. So far, Bombardier has not made any move to open a location in Maine.
In early 2012, Maine lost a bidding war with Wisconsin to secure potential manufacturing jobs associated with the aircraft startup Kestrel Aeroworks.
LePage said Monday that he has spoken to the chairman of Airbus, a major aircraft manufacturer, about coming to Maine.
“When I spoke to him, he said I need two things: ‘What are your energy costs?’ and ‘I need right to work,’ ” the governor said.
Representatives from Airbus did not return calls or emails seeking comment.
Peter DelGreco, president of Maine & Company, a Portland-based relocation company, applauded the governor’s proposal.
“We’re very excited any time the state wants to have a conversation about jobs, job creation and economic development,” he said.
Eric Russell can be contacted at 791-6344 or at:
Twitter: @PPHEricRussell
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