There are some ideas that won’t die. As if they were zombies, you can find them shuffling mindlessly in the places where they once walked in life, when they were fueled by good intentions and not weighed down with empirical data.
Somewhere in Maine today, a grandmother will swear to a hatless child that “you lose half your body heat through your head,” a zombie idea that no amount of science can kill.
In a few months, the zombie notion “wait 30 minutes after you eat before swimming” will be offered as sage advice on the beach, even though no study has been able to support it.
And Thursday, the walking dead will come to Augusta, where the Legislature will hear testimony on whether to begin winding down the benefits of Pine Tree Development Zones. The decision should be an easy one. But zombies like this are hard to kill.
Pine Tree Zones appeared with a lot of optimism in 2003. The idea was to create jobs in economically disadvantaged parts of the state. The program packaged various tax credits and discounted energy rates in order to reward companies that created new jobs, either by attracting businesses to Maine or helping existing ones expand. The zones have been expanded over the years and now include most of the state.
About 200 companies receive benefits, costing the taxpayers about $12 million a year. There’s only one thing missing: the jobs.
There are definitely people working for the companies that get the state aid, but there is no way of proving that any of those jobs were created as a result of the tax breaks. For two years, a company that doesn’t create a single job can get the same benefits as a company that undergoes a big expansion. It only takes the creation of one job to extend benefits to five years, during which time the company could be investing in labor-saving machinery tax-free.
The state’s government watchdog agency, the Office of Program Evaluation and Government Accountability, reported last summer that Pine Tree Development Zones cannot be said to achieve any of the program’s goals – creating jobs or increasing pay. You would think that it would be easy for lawmakers to look for better ways to spend the state’s money. But ending zombie programs is never easy.
For one thing, the companies that receive this money are used to it and don’t want to give it up. General Dynamics, the defense contracting giant that owns Bath Iron Works, gets help through the program. So does TD Bank. Both rank in the top 10 of Maine’s private-sector employers, giving them clout at the Legislature.
But what makes this such a resilient zombie policy is the bipartisan way it makes lawmakers of both parties get glassy-eyed, as if they had been bitten by the zombie.
For one thing, it hits right in the middle of the Republicans’ biggest blind spot, which is the idea that tax breaks don’t count as spending. All they are doing is letting businesses keep their own money, the Republicans reason, so when they cut taxes, they don’t have to think about the lost revenue. If you end up with a budget shortfall, that’s the fault of free-spending Democrats, not them.
And the Democrats’ guilty secret is that, while they talk about government’s duty to improve people’s lives, they don’t mind paying for it through the fine print of the tax code, because unlike direct expenditures, the full cost won’t show up in the budget. So a tax credit here and a rebate there can serve as a stealth wage subsidy without a big price tag.
If Pine Tree Zones were working, the bipartisan support would make sense. But the parts of the state that the program was designed to help are still the weakest economically, and with Maine ranked 46th for job growth and 30th in median income, it’s worth questioning whether we could do better.
Are there are other ways to spend $12 million a year on job creation if lawmakers let this ineffective program die a natural death?
Yes, there are. Investing in ports, rail, roads and high-speed internet would also bring jobs to parts of the state that are hurting. You could train a lot of apprentices for the high-skilled jobs that Maine businesses say they can’t fill, and at the end of it, you would know exactly how many jobs were created.
Other good ideas are out there, too. It would be a shame if the zombie ideas keep winning.
Greg Kesich is the editorial page editor. He can be contacted at:
Twitter: gregkesich
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