While Maine’s Legislature struggles to find sufficient funding for essential programs, the Maine Department of Economic and Community Development is working on a submissions list of “low-income communities” eligible for Opportunity Zone investments. In other words, tax breaks.
Spokesman Doug Ray recently admitted that the criteria for being added to the selection list are “broad.” Candidate communities could be suffering from consistently high unemployment, struggling retail centers or have vacant industrial sites. Claiming that investors will be attracted by added capital gains incentives, Opportunity Zone proponents believe that the taxpayer-supported initiative will be a catalyst “to move the needle” in depressed areas of the state.
Noble efforts for sure, but please excuse our lack of optimism given the dozens of existing state-backed programs that lack oversight and consistent measurements to assure that funds focus on real economic growth. As recently reported by OPEGA, the state’s current incentive programs have had marginal success picking winners and losers among the businesses of Maine.
Opportunity Zones sound like a first cousin to Pine Tree Zones — the state’s economic program that expanded everything except jobs. Virtually every Hancock County business currently is looking for qualified employees — seasonal and permanent. Consistently high unemployment, a primary criterion for Opportunity Zone funding, is not our problem. Pitting towns, cities and states against each other in offering businesses benefits to stay, move or expand may seem attractive politically. But such programs ultimately outbid each other, consuming even more tax money while generating small returns. Even worse, administrative costs are gone, forgotten in the measurements, and seldom recovered.