Chamber testifies in support of bill to extend Pine Tree Zone benefits

On Tuesday, March 23, Linda Caprara testified on behalf of the Maine State Chamber of Commerce in strong support of LD 730, An Act to Protect Economic Competitiveness in Maine by Extending the End Date for Pine Tree Development Zone Benefits, at a public hearing before the Joint Standing Committee on Innovation, Development, Economic Advancement and Business.  During her testimony, Caprara thanked the bill’s sponsor, Sen. Mattie Daughtry (D-Cumberland), for bringing this proposal to the committee.

Caprara testified that the Pine Tree Development Zone (PTDZ) program is one of Maine’s primary economic development tools – one that has helped to grow Maine’s economy and has made a significant contribution to the level of investment in Maine. According to 2019 data from the Maine Department of Economic & Community Development (DECD), the 180 businesses enrolled in the PTDZ program represented at the time:

• More than 7,000 employees with more than $380 million in combined payroll;
• An average wage of $52,555 for employees; and,
• More than $500 million in qualified investment associated with the PTDZ program.

 
Because the PTDZ program encourages investment, it aligns nicely with the goals of Maine’s Strategic Plan.  The Office of Program Evaluation and Government Accountability (OPEGA) noted this in the recent interim report on the PTDZ program that was presented to the Government Oversight Committee (GOC). The goals of the state’s strategic plan are to grow the average wage by 10% to the benefit of all income levels; increase the value of what Maine sells per worker by 10%; and attract 75,000 people to Maine’s workforce from within and outside the state.  

Caprara noted that the Legislature has made some changes to the program in the past few years – changes that have included clarifying job creation as the main goal of the program, requiring that companies add at least one new job before qualifying for benefits. In addition, a “but for” clause was added to provide some assurance that the program in fact does influence companies decision-making process when they decide to invest in a particular state or location. One could argue that it does or doesn’t have anything to do with the investment, but it is an additional step the business has to adhere to that helps to validate that argument. 

Through the years, the Maine Legislature has clearly recognized the importance of the PTDZ program.  Originally, the PTDZ program was directed at economically distressed areas of the state. However, during the 2009 recession, the Legislature voted – the House, in particular, voted overwhelmingly 142-0 (9 absent) – to make the program available to companies across the state. Legislators clearly wanted PTDZ available for use in their districts. In 2018, the Legislature voted to extend the program until December 2021. 

Many people believe that Maine has significant investment dollars and programs available to attract jobs and opportunities to Maine. In fact, Maine has few incentives on the books to attract investment. Keeping Maine businesses competitive should be a number one priority. PTDZ is one incentive that has worked, and the state needs to ensure its future going forward. The Maine State Chamber believes that the PTDZ program will ultimately help the state realize its goal of growing Maine’s economy – and growing Maine’s economy is crucial, given the economic crisis brought on by the COVID-19 pandemic. If you have any questions about LD 730, please contact Linda Caprara by calling (207) 623-4568, ext. 106, or by emailing [email protected].