Pine Tree Development Zone bill tabled in IDEA committee

On Tuesday, April 6, the Joint Standing Committee on Innovation, Development, Economic Advancement and Business (IDEA) held a work session on LD 730, An Act to Protect Economic Competitiveness in Maine by Extending the End Date for Pine Tree Development Zone (PTDZ) Benefits. In her March 23 testimony strongly supporting LD 730, Linda Caprara, senior government relations specialist for the Maine State Chamber, thanked Sen. Matthea Daughtry (D-Cumberland) for sponsoring this important bill.

The IDEA committee asked for more information on the Pine Tree Development Zone (PTDZ) program. It is extremely important this bill pass because it extends the PTDZ program by three years. The program is scheduled to sunset in December 2021. Use of the PTDZ program is one of Maine’s primary economic development programs that has helped to grow Maine’s economy and continues to do so. Since its enactment, the PTDZ program has made a significant contribution to the level of investment here in Maine. It has clearly met its intent to improve economic development in the state.

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.

It is crucial this program remain in place, particularly through the next few years as Maine works through the economic crisis the COVID-19 pandemic has brought to the economy. If you are concerned about keeping this program intact, please contact your legislators today. The committee’s next work session has not yet been scheduled. If you have any questions, contact Linda Caprara, by calling (207) 458-2133 or by emailing lcaprara@mainechamber.org.