Six years in the Legislature refines one’s sense of smell and sharpens certain instincts, so please pardon my cynicism, but is that a faint whiff of good-intentioned “nonpartisan” tax subsidy in the air?
It may be emanating from the news last week about Maine’s private sector teaming up with boatloads of smart people to create “traded jobs” in agriculture, aquaculture and biopharmaceuticals.
I’m referring to FocusMaine, an impressive collection of the who’s who in Maine accomplishment: “Using a fact-based, disciplined approach to industry development, FocusMaine acts as a catalyst for the accelerated and sustainable growth and business confidence that energize Maine’s economy.”
To be clear, I want FocusMaine to succeed and fully welcome and appreciate the effort. It’s refreshing that vast wells of experience are being tapped to boost Maine’s slagging economy to complement our daily repast of enthusiasm for fresh-faced entrepreneurship. It’s exciting to hear about the potential of “traded jobs” that will pay more and provide economic security to families, and it makes perfect sense to harness the strength of Maine’s brand and focus on farming, fishing and nature-sourced wellness.
The vision of FocusMaine is exactly the kind of thing that makes lawmakers swoon and policy wonks like me giddy. In other words, it’s the perfect recipe for doing really foolish things with taxpayer money.
Look no further than 2011 to see the disastrous results of a good-intentioned job creation scheme gone bad.
Brookfield Asset Management, the “global asset manager focused on property, renewable power and infrastructure assets with approximately $150 billion of assets under management,” wanted to sell its Maine Katahdin Paper Mills in Millinocket and East Millinocket for $1 to International Grand Investors Corporation, part of a huge Chinese investment company that had been buying up mills in the United States. If the sale didn’t go through, Brookfield said, it would sell its Katahdin assets and eliminate between 400 and 600 jobs.
Selling two major manufacturing plants in Maine to China for one dollar should have raised eyebrows, but instead of a canary in the coal mine, panic over job loss caused stupefied lawmakers to agree to a deal for the birds. The “sale” of the mills was only outdone by a gift that keeps on giving.
You see the landfill that took the waste from these Brookfield mills was an “asset” the International Grand Investors didn’t want in their “portfolio,” so the Legislature accepted the landfill on behalf of the people of Maine as a “gift,” and to date we have spent over $1.3 million maintaining it (more, by the way, than what’s been collected chasing welfare fraud). On top of being the proud owners of a toxic dump, Maine taxpayers are also forking over $16 million to out-of-state investors who shuttered the mills and eliminated all the jobs, thanks to the New Markets Tax Credit Program, designed by the very people who profited from it and enabled by well-meaning lawmakers bent on creating jobs. In other words, Maine traded 600 jobs and over $17 million for a toxic landfill.
The fact is that poorly paid part-time legislators juggling hundreds of bills are no match for slick lobbyists for the private sector peddling hundreds of jobs. Desperate times call for desperate measures, and rural Maine communities are desperate. Lawmakers are put into a vice. They can’t afford corporate welfare, but they can’t afford not to keep voting for it.
So let’s learn from the past and focus on the future.
FocusMaine should get the full cooperation of government in its earnest attempts to improve the Maine economy. But for real progress it must zealously guard against the temptation to give out tax breaks as a way to grow business. FocusMaine must beware of blurring advocacy for “business-friendly” policy suggestions with shifting the risk and reward of investment. Any taxpayer subsidy or publicly supported program springing from FocusMaine must be matched with transparency and real accountability.
The potential for any public-private partnerships or government-sponsored incentives to make real progress depends on an equitable balance of risk and reward. The public can’t bear all the risk for ventures that fail, even ones intended to create jobs.
In today’s global economy, government regulation is being used as a bargaining chip between elected officials trying to improve the daily lives of their constituents and businesses committed to improving the bottom line for investors.
As the experienced and savvy teams of FocusMaine surely know, the “free market” is like a “free landfill.” Businesses shape laws, and laws affect business.
We need and deserve to have both sides of the negotiation held accountable.
Cynthia Dill is a civil rights lawyer and former state senator. She can be contacted at:
dillesquire@gmail.com
Twitter: dillesquire
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