2018-03-08 / Opinion

Looking Beyond BIW’s Beleaguered Tax Break


Gary Anderson Gary Anderson When I was a child my mom would ask: “Just because all your friends do it does that make it right?”

Apparently for some Maine legislators it does, at least regarding tax breaks and nondisclosure. Because other large corporate entities in our state, or as distant as Pascagoula, Mississippi, get benefit from tax incentives without any real demonstration of actual need, Bath Iron Works should be treated similarly.

BIW made that argument a chief justification for noncompliance to requests from the Legislature’s Taxation Committee to be more forthcoming in asking Maine taxpayers to continue underwriting their competitiveness. At the same time, they insist that after 20 years of such underwriting they remain as competitively challenged today as when they were when still building ships on inclined ways and working outdoors on Maine’s very unlevel meteorological playing field. Evidently, all of the always scarce taxpayer money Maine spent accommodating BIW’s initial Shipbuilders Tax Credit achieved little in assuring BIW’s long-term contract security.

Despite that obvious cost-benefit red flag in rebooting another $3 million per year tax break, an impressive big guns bi-partisan sponsorship remains bent on doubling down on that bet.

When BIW was a locally-based economic engine it never requested such public assistance. It was only after it became a subsidiary of General Dynamics’ mega deep pockets that it “needed” to take hat in hand to hardworking Maine taxpayers in asking for a financial legup.

Coincidentally, or not, BIW has been recently identified as Maine’s top spender in legislative lobbying, using its 100 percent taxpayer derived profits to influence award of yet additional taxpayer largesse that would renew BIW’s past 20 year avoidance of paying their full tax assessment.

For those proponents of “Just give GD-BIW what it wants and be thankful that they do business here,” taxpayer assistance is rationalized as a prudent insurance premium despite the reality that if BIW suffers a cataclysmic downturn Maine taxpayers will receive no compensation whatsoever.

For some others in the legislature that traditional rationalization warrants serious reevaluation. But not right now, not at BIW’s current turn at bat.

This time around the Legislature’s pitching has been less softball than usual, yet the game is still rigged in favor of another home run for corporate welfare argued as a necessary compromise for the state’s general welfare. This time around the contest isn’t a given slam-dunk, yet BIW still has sufficient mojo working to influence enough politicians to acquiesce, whether out of fear of losing reelection or fear of an actual “I will be held responsible” economic Armageddon.

That BIW’s “poor us” rote song and dance still commands bipartisan leadership fealty only underscores the top-down lock-stepped immutability of an entrenched two-party system.

As a child, I was always perplexed by what the classroom game “musical chairs” was teaching. Maybe it was public education’s wry way of illustrating the harshly competitive dynamics of capitalism’s fundamental tenet that someone has to be left out.

Fine. No problem. I say stop the music and let BIW rudely discover that IDEXX, Hannaford, L.L. Bean, et al. have already taken the last remaining chairs. Let BIW be the first example set that the game has changed. Claimed financial need needs to be demonstrated. Not 10 years down the road but right now. Not to some other questionable request for corporate welfare but to this most blatant example.

BIW begs all credulity in asserting that, despite being a subsidiary of General Dynamics’s vast resources, their competitiveness must be of their own stand-alone making. They successfully sold that bridge to the people of Maine 20 years ago and are now attempting to resell it unquestioned and anew to the same buyer. As the expression goes “Fool me twice, shame on me.”

The shame is that BIW, so positively remembered by so many, no longer exists. In its place is General Dynamics Bath Iron Works, where General Dynamics has the controlling interest and where the supposed “necessity” of tax incentives comes hand in profit obsessive hand with its from-away parent company bean counting bottom line.

What LD 1781’s legislative sausage making has taught us thus far is that, whenever taxpayer money is to be spent, full transparency must be made a non-negotiable requirement by statute. The days of backroom deal-making at taxpayer expense must end.

Fortunately for Maine’s electorate, if ultimately passed by the full legislature, LD 1781’s supposed dire need for expedited second session emergency passage won’t take effect until 2020. That’s plenty of time to put forth a citizen’s veto. More than once, if need be.

Corporate addiction to contrived taxpayer “incentivization” needs to be curtailed, and legislative enablers, no matter how well intended, need to be convinced of that reality or turned out of office. Maine’s leadership needs to envision a road map to prosperity that fills our public coffers rather than unethically raiding them so the most successful among us needn’t pay their fair share while calculatingly increasing their own profitability.

How that can be achieved should be the very first question voters put to every gubernatorial and legislature candidate running this year.

Gary Anderson lives in Bath.

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