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July 9, 2018

Legislature extends Pine Tree Development Zone program by 3 years

The state Legislature added three years to the life of a business tax-break program that’s drawn much criticism as well as praise.

The Portland Press Herald reported that the Pine Tree Development Zone program was scheduled to expire at the end of the year, but lawmakers extended the date to Dec. 31, 2021. The law’s sunset provision means that benefits under the program will end in 2031, instead of 2028.

The extension was made without the signature of Gov. Paul LePage, who had wanted a five-year extension.

Created by the Legislature in 2003, the Pine Tree Development Zone program grants 10-year state income tax credits and sales tax exemptions to businesses that create well-paying jobs in certain industries.

The state has established more than 200 of the zones, at a cost about $11.4 million a year, according to the Press Herald.

Some critics charge the program provides generous tax breaks to corporations but little benefit to the state.

In 2017, the Office of Program Evaluation and Government Accountability, a watchdog agency for the Legislature, reviewed the PTDZ program and concluded there was no telling how many jobs it helped create, if any.

Three years earlier, a Massachusetts consultant studying the program found that it provided $358 million in economic benefit to the state during 2012. But the program cost the state $457 million in expenses and lost tax revenue.

However, LePage and many legislators have championed the program, claiming it has spurred economic development. Some companies agree.

“The Pine Tree Development Zone program has supported our growth and helped make it possible for us to continue to add jobs as we grow our business,” Don Oakes, chief executive officer of Portland-based tote-manufacturer Sea Bags, told the Press Herald.

In November, Bath Iron Works Vice President and General Counsel Jon Fitzgerald expressed support in a letter to the Legislature. “BIW is a participant in the pine tree zone program and believes it has been an important incentive for businesses to locate in Maine or stay here while continuing to invest in operations that provide jobs and economic activity,” he wrote.

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