By Ramona du Houx
At Barber Foods in Portland last July, Governor Baldacci signed a groundbreaking law that will aid economic growth as the Pine Tree Zone program becomes more business friendly and aggressive.
“I’m pleased to extend the significant benefits of the Pine Tree Zone program to more Maine businesses,” said Baldacci. “This will spur more economic growth throughout Maine and create more jobs for our quality workforce, providing a boost for manufacturers to expand their base.”
According to the Department of Economic and Community Development, the Pine Tree Zone (PTZ) program, started by Governor Baldacci in 2003, offers eligible businesses the chance to “greatly reduce or virtually eliminate state taxes for up to ten years.” Until now the PTZ program has been limited to areas of the state that have high unemployment rates and lower wages. The strategy to infuse these locations with new business and help existing businesses has paid off. In just three years, there have been 122 companies certified, with nearly 4,500 full-time jobs created. The certified companies’ estimated investment projections are more than $334 million.
“Going around the state, many businesses told me they needed Pine Tree Zone benefits too, in order to compete nationally and around the world. I know our people can outperform and out-produce anyone, anywhere,” said the governor. “This is the next step in expanding the program.”
The expansion enables an established manufacturer to be eligible for, virtually tax-exempt, PTZ status anywhere in the state, as long as they hire four new employees and invest a minimum of $225,000.
“The governor started the ball rolling, working with Rep. Charlie Harlow and Steve Barber. Rep. Smith defined it so the new bill eventually won unanimous support of Maine’s Legislature on a roll call,” said Peter Martin, an advocate of the bill. “By lowering the amount a company needs to invest, more companies will apply.”
“The great majority of PTZ companies have been companies in Maine, expanding in Maine at their current locations,” said senior economic advisor to the governor, Jack Cashman. “National Semiconductor is a great employer looking to expand, which put Maine in competition with China and Texas. A company like National Semiconductor wasn’t going to expand in an area already designated as a PTZ. With the new law National Semiconductor can now expand where they are in South Portland and enjoy PTZ status.”
“I’m pleased because this expansion of the PTZ program provides incentives for businesses already committed to the state of Maine, because they have been here three years and they will be expanding at the location where they are now established,” said Rep. Nancy Smith who amended the initial bill. “By lowering the threshold [the amount a company has to invest] smaller manufacturing companies can apply for the certification, anywhere in the state.”
The Barber Foods family turned out for the bill signing, celebrating their family business. Augustus Barber senior talked about his immigrant parents who came to Maine to realize their American Dream. Last year Barber Foods was recognized for being an exemplary employer. Every year they put two immigrants through college. “I feel it’s the right thing to do. We were immigrants; it’s hard to start fresh in a new country,” said Barber senior.
“Being PTZ certified will help us expand and allow us to stay and grow in Maine,” said Steve Barber. “It levels the playing field for us.”
Barber also said that he knows of companies who will now apply for PTZ status because of the new expansion law. Portland Shellfish Co. is one.
“Portland Shellfish is looking to expand our product line and go into the value-added business with crab, shrimp, and lobster products, resulting in good-paying jobs for the people of Maine,” said Tom Carr. “In order to do that we need to invest in equipment and personnel. Being PTZ certified will enable us to upgrade our facilities and compete on a national and international basis.”
“As in the philosopher Yogi Berra’s words, ‘thank you for making today necessary’,” said Danna Connors, president of the Maine State Chamber of Commerce. “Without the governor’s PTZ program, today wouldn’t have been necessary. It takes three ingredients for growth: people who believe in making it happen, good companies, a partnership with the state and industry. We have all three in Maine.”
With the business tax exemption repeal, the new expanded PTZ program, and workers’ retraining efforts, Maine is working towards having the most aggressive business incentives in America.