Dr. G. Fergeson said he found “lightening in a bottle” coming to Maine for the workforce and the Pine Tree Zone Tax incentives. Photo by Ramona du Houx
By Ramona du Houx
July 3rd, 2009
In 2003 Governor John Baldacci established Pine Tree Zones (PTZ’s) to make areas that needed economic development more attractive to businesses by providing tax incentives. Those PTZ tax-free benefits have been extended to cover the entire state. Under the new law a two-tiered system will be implemented so that more economically challenged areas will have a longer benefit period.
“The program has resulted in more opportunities for Maine workers and businesses. This bill comes at an important time,” said the Governor. “Pine Tree Zones enable Maine to encourage growth internally, and attract new businesses to the state.”
Because of recession, in 2009 only, Maine will provide ten years of PTZ benefits anywhere in the state. The goal is to encourage development projects spurring job creation and investment.
“During these difficult economic times, it’s vital that we continue to take aggressive steps to encourage business growth and job creation, including continued focus on target sectors like manufacturing and technology, expansion across Maine of tax free areas for them to grow in, and the lowering of taxes like our recent income tax reduction,” said the Governor.
Starting in 2010 areas that have been identified as zones with higher economic development needs will have PTZ benefits for companies for ten years. Less challenged economic locations, York and Cumberland Counties, will receive the benefits for five years.
According to the Maine Department of Economic and Community Development (DECD), at the end of 2008, there were a total of 213 Pine Tree Zone certified businesses in Maine, who reported their plans to create more than 6,500 jobs and invest $685 million. Those jobs are expected to generate $203 million in payroll.
Companies that received awards within the last year totaling $50million from bond funds, for their technological expertise and growth plans, are certified PTZ businesses. All of them have expanded in recent years because of these tax incentives; many would not have been able to do so without the incentives. One recipient, Hodgens Yachts, is now opening a new business in Hamden after expanding to Richmond last year. The family-run boat builder has been building quality ships for over a hundred years in Maine.
Backyard Farms, a state-of-art hydroponic tomatoes farm, in Madison, is currently expanding -adding 75 new jobs along with a new green house. They wish to turn Maine, “into the breadbasket of New England,” said their CEO at the opening. They are in Maine because of the incentives provided by PTZ’s, tax incremental financing offered by Madison, electric rates, and the workforce.
Other companies searched America to find the best location. They focused on workforce potential, and tax incentives. NotifyMD, Barclays Bank and T-mobile, to name a few, would never have located to Maine without the Pine Tree Zone incentives.
More about Pine Tree Zones:
• Pine Tree Zone certification is a performance-based program; businesses do not receive benefits unless they create jobs and make additional investments.
• The jobs created must be full time with incomes at or above the county per capita average. The have to provide access to group health insurance, and to a qualified retirement plan
• A business must be classified in 1 of 9 qualifying sectors; Advanced Technologies for Forestry & Agriculture, Aquaculture & Marine Technology, Biotechnology, Composite Materials, Environmental Technology, Financial Services, Information Technology, Manufacturing, and Precision Manufacturing.
• Benefits include income tax credits, sales tax exemptions, employee income tax withholding (payroll tax) reimbursements, and access to reduced utility rates; these provide a nearly tax free period of benefits for the duration of a company’s PTZ certification.