AUGUSTA — The Portland Press Herald really ought to re-examine its story and subsequent editorial (published Monday and Tuesday, respectively) on the Legislature’s extension of the state’s Pine Tree Development Zone program. Both the Press Herald news piece and editorial paint what we believe is a misleading picture of the effectiveness of the Pine Tree program.
The pieces in question labeled the PTDZ program as “controversial,” questioned the program’s effectiveness in terms of cost to the state and claimed it has helped to create “hundreds of tax havens.” Using the term “tax havens” to describe the PTDZ program is simply not true. The term “tax havens” has nothing to do with the PTDZ program.
Equally disconcerting was the use of outdated data to back up both the reporter’s conclusions as well as the paper’s position on the program. Specifically, a 2014 report undertaken by Investment Consulting Associates was cited as opposed to an up-to-date, comprehensive report completed by the same group that was done in 2016. The 2016 report paints a much different picture of the PTDZ program.
According to Investment Consulting Associates’ 2016 report, “the PTDZ program has been shown to effectively improve the competitive economic development environment for the state of Maine with a positive return on investment. The costs involved in the PTDZ program are outweighed by the direct returns of the additional investment it has attracted.”
Over 200 businesses are currently enrolled in the PTDZ program across the state. The report concluded that for every $1 invested, the state gets back $2.23; in other words, a 123 percent return. That’s pretty impressive, to say the least. Furthermore, the report goes on to state that the benefits/tax revenues for the state of Maine with PTDZ are $3.3 billion, compared with $1.4 billion without. But why no mention of these results in the news piece or editorial – results that helped in the Legislature’s decision to extend the program?
With respect to employment and new jobs, according to the Department of Economic & Community Development, Maine companies certified under the PTDZ program currently have 29,000 employees. Of that figure, over 9,500 were jobs that were added after the companies became PTDZ certified. Also according to the Department of Economic & Community Development, in 2016, PTDZ-certified companies made capital investments of over $457 million. None of that sounds like employers seeking “havens” for their money. Yet none of that information was shared with your readers.
The paper rightly pointed out that the Office of Program Evaluation and Government Accountability report found that the legislative changes to the PTDZ program over the years made it available well beyond the high-unemployment areas it originally was meant to serve. But in reality, that was the Legislature’s intent.
The PTDZ program was initially directed at economically distressed areas of the state. However, in 2009, during the recession, the Legislature voted overwhelmingly to make available the program to companies across the state, with the exception of Cumberland County and parts of York County. The extent of the support that the proposal received confirmed its importance economically. And rightfully so. Legislators wanted investment opportunities in their districts at a time when this state was begging for any jobs. Legislators did what they felt was best for the state and their own districts, and I applaud them for that.
I would also like to thank all the legislators for their support this year of L.D. 1654, which extended the Pine Tree Development Zone program by three years. The PTDZ program has made a significant contribution to a net increase in jobs and the level of investment we have seen here in Maine. It’s the kind of investment that retains Maine jobs and businesses here and keeps businesses growing in the state, as opposed to forcing them to relocate to more business-friendly states. At the same time, the bill instills greater accountability and transparency with which future lawmakers may judge the program’s effectiveness.
Many people believe that Maine has significant investment dollars and programs available to attract jobs and opportunities to Maine. The real fact is Maine has few incentives on the books to attract investment. PTDZ is one of those incentives. We believe keeping Maine businesses competitive should be a No. 1 priority. We feel the PTDZ is one incentive that has worked, and the state needs to ensure its future on a going-forward basis.
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