Thursday, June 23, 2005

Editorial: Bad for business

Published in the Current

SCARBOROUGH (June 23, 2005): We hear a lot about Maine having a bad climate for business, and most notably we heard it again last week from Harvey Rosenfeld, Scarborough’s top person for drumming up business. It’s getting worse, and that needs to change.

“If profit’s the main goal, there are other better places to be” than Maine, Rosenfeld told members of the Scarborough Community Chamber of Commerce.

It was Thursday lunchtime when he told chamber members the real value for business in Maine is “quality of life” for workers, rather than actually making the owners money.

The following night, Maine’s lawmakers voted to accept a state budget that made Rosenfeld’s statement about profits ring even truer.

The Legislature did not just raise corporate income taxes, but also cut back on state reimbursements to companies for major investments in equipment. The state’s expected revenue from the changes? $16 million over two years – not nearly enough to be worth the loss of goodwill, or perhaps sympathy, from big businesses with a presence in Maine.

Gov. John Baldacci talks the good talk, saying he is defending Maine jobs and has a plan for developing Maine’s economy. If this is that plan, he needs to think again, and fast.

While the state is certainly in a budget hole, taxing business more is not the way to get out of it – especially not taxing large businesses that have invested heavily over the years and are longtime cornerstones of local, regional and state economies.

These businesses are the ones that employ large numbers of people in their own and surrounding communities. They are the barometers of Maine’s economy.

They should be expected to pay their fair share of the state’s expenses, but should not be looked at as a cash cow for state budgeters when other wells run dry.

The companies are rightfully upset and reconsidering future investments in Maine, which should have occurred to lawmakers before they voted.

UnumProvident, which has been shifting staff members and assets out of Maine in recently years, says it doesn’t like the message the state is sending. We can’t afford to shove companies like UnumProvident out the door without any plan for replacing the jobs and local investments they provide.

But an increased tax on business investment is worse than no plan for replacement – it’s a deterrent for companies that might be considering Maine’s quality of life in the future. They certainly won’t be considering making any money here.

And UnumProvident is not the only company angered by the new taxes.

National Semiconductor says the new budget has broken a promise made by state officials in their effort to get the company to invest here – a promise that the state would reimburse the company for every penny it pays in local taxes on business equipment.

States don’t break promises to big business without huge long-term consequences.

Rosenfeld shared with the chamber members a vision of Haigis Parkway as home to top-notch research centers, high-tech companies and precision manufacturing.

If Scarborough – or Maine – is to have a prayer of that vision coming true, the state’s increasing taxation of businesses has to be reversed now.

Jeff Inglis, editor

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