Task forces to study BETR/BETE and ‘tax expenditures’
The state budget that passed in June includes the establishment of two task forces that are very important, and potentially threatening, to many of Maine’s businesses, particularly manufacturers.
Tax Expenditure Review Task Force: The first task force was established to identify $40 million in cuts to Maine “tax expenditures.” The $40 million of cuts have already been included as revenue in the state’s two-year budget. If the task force fails to find the $40 million, the state’s revenue sharing to municipalities will automatically be cut by $40 million. Thus, there will be enormous pressure on this task force to find $40 million in cuts. This task force is a major threat to manufacturers and has already held its first of 6 meetings. Some of the costliest tax expenditures are those used by manufacturers. Among other things, the task force will be examining BETR/BETE, sales tax exemptions for manufacturing equipment, raw materials, industrial energy, pollution control equipment, Pine Tree Zones, Maine Capital Investment Credit, High-Tech Credit, New Markets Tax Credits, etc. It will be critically important to make sure that the members of the task force are well educated about the importance of these exemptions and economic development incentives, and what other states do in this regard. Here is a link to the state’s tax expenditure report, which the Task Force is using to formulate its list of cuts. http://media.kjonline.com/documents/tax_expenditure_report_13.pdf
BETR/BETE Conversion Task Force: The second task force was established to study the conversion of the BETR program into the BETE program. While that could be a good thing in the long run, if it is going to happen it must be done in a very well-thought out way that does not cost manufacturers a lot of money during the transition. For example, the Governor had proposed to accomplish this by skipping more than a year of BETR payments in his budget proposal last year. This task force needs guidance from the manufacturing community to assist it in its mission, and to prevent further erosion of the BETR program.
Jon Block, of Pierce Atwood, LLP, has been very involved in these issues for many years and, along with Pierce Atwood’s government relations team, is leading a group of manufacturers supporting a lobbying effort for both of these task forces. Jon is looking for more manufacturers to join this group, so that he has a broad cross-section of the state’s manufacturing community. The costs to participate are manageable since the costs are spread across all of the members of the group. If you are interested in participating, or would like more information, please contact Jon Block.