Business handouts: the gift that keeps on giving

The 128th Legislature is still convened in Augusta, more than two months after its scheduled adjournment. Too much regular session work was deferred, left incomplete or otherwise delayed by politics, brinksmanship and poor planning. Significant budgeting matters, as well as urgent legislation and issues with voter-enacted referendums, have been mired in contention between the Governor’s office and legislative leaders.

Yet somehow, in their wisdom, Maine lawmakers voted last week in support of a program that was flunked by their own legislative Oversight and Review Committee. That committee has determined that Maine’s Pine Tree Development Zone program lacks accountability. Achievement (if there is any) of its intended goals is not measureable. The Office of Program Evaluation and Governmental Accountability (OPEGA) is the watchdog the Legislature created to keep lawmakers honest, expenditures in line and programs relevant.

True to its mission and in light of obvious Pine Tree Zone shortcomings, OPEGA affirmed what critics have openly voiced: “Whether the program is achieving results despite design is unknown, as adequate data is not readily available to assess outcomes.”

In 2014, the state paid a Massachusetts firm to audit the Pine Tree Zone program, a report that concluded that the program’s cost to taxpayers exceeded what it generated in benefits, jobs or business expansion — the stated goals. But proponents and benefactors of the 15-year-old program continue to tout the “benefits.” This despite the fact that few measurements exist which would enable one to ascertain how (or if) the program has created the intended jobs, the higher wages and the increased health care benefits for existing employees. The Pine Tree promise was that Maine businesses would expand and add employees as a result of this purported business booster.

The rewards to employers in terms of tax breaks already have been provided — to the tune of almost $500 million. This has been the cost to Maine taxpayers while two separate evaluations report that any measures of the Pine Tree Zones’ success remain elusive.

A series of OPEGA reports depict a piece of well-intentioned business incentive legislation involving taxpayer money spent or taxes waived for outcomes that can’t be measured. It’s not even certain that the program is monitored. All the while, taxpayers remain on the hook for millions of dollars of business commitments. The beneficiaries — the receiving businesses — are the sole advocates of this expenditure of money not available to the majority of businesses in Maine.

Need we say that this is a flawed system? It’s another reminder of how government is swayed by special interests that ultimately selects winners and losers. The vehicle of the state’s largesse is a program that legislators, 15 years later, know little about. Somebody said it would be good for business, and who doesn’t want to be pro-business?

The Legislature has wrestled with many weighty initiatives this session, many of which lack the funds needed for implementation. Disregarding its own oversight committee recommendations, our lawmakers voted to extend Pine Tree program funding for three years. And, because the program has a 10-year gestation period, that means we’ll be enduring Pine Tree costs until 2031.

This business handout program clearly is not meeting its well-intentioned goals. The lack of palpable results gives critics ammunition to state that the Pine Tree Zone program is nothing more than corporate welfare. To disregard the requested oversight report provided by OPEGA begs the question: Why commission investigative work by a watchdog agency if you ignore it? For a legislative session seemingly out of control, this episode is but another black mark for the leadership in Augusta.

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