Lawmakers seek changes to tax-credits program

State lawmakers said they’re seeking changes to a Maine program that allowed investors to inflate the amount of tax credits they received for a mill investment by using a one-day loan.

The Portland Press Herald reported that scrutiny over the Maine New Markets Capital Investment program was prompted by a Maine Sunday Telegram investigation published this week. The newspaper’s investigation found that the program allowed two out-of-state investors to receive tax credits for an investment that mostly consisted of a one-day loan. None of that investment was used to improve the Great Northern Paper mill in East Millinocket, as stated in their initial application.

House Speaker Mark Eves and Sen. Justin Alfond, both Democrats, told the newspaper they both want to see fixes to the program that would prevent such a thing from happening again. Eves called the GNP deal, which was orchestrated by New Hampshire investment firm Cate Street Capital, “a classic case of fraud and abuse of taxpayer dollars,” and Alfond called Cate Street “a bad actor (who) came in and took advantage of a desperate situation.”

Sen. Andre Cushing, R-Hampden, told the newspaper he thought the GNP deal was made “in good faith,” but that he supports taking another look at the program for improvements, adding “there always needs to be scrutiny when things don’t work out successfully and we aren’t able to keep jobs.” Gov. Paul LePage said on Tuesday that he wasn’t happy about the deal, but that a deal is a deal and he didn’t know how to stop the tax credits from being awarded. His spokeswoman, Adrienne Bennett, later told the newspaper that the governor is “very interested” in the issue and that he sees proposed changes by the Finance Authority of Maine as “good first steps.” FAME’s proposed changes include barring the use of one-day loans.

Source: Portland Press Herald

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