Gov. Janet Mills is proposing to revamp the state’s jobs incentive program from one focused on where to create new jobs to one stressing the quality of the employment.
Mills’ Dirigo Business Incentive program, unveiled Tuesday, would provide tax credits to businesses that create jobs requiring worker training and additional credits for businesses investing in “high value” sectors.
The plan would drop the current Pine Tree Development Zone program that encourages job development in designated areas of the state, primarily in more rural parts of central and northern Maine. There were no zones in Cumberland, York, and Sagadahoc counties.
The Pine Tree Development Zone program was slated to cease at the end of the year, but Mills’ proposal would extend its life for a year to provide a transition to the new program, which would start in 2025. The Mills administration also is proposing to roll two other existing programs, Employment Tax Increment Financing and the Maine Capital Investment Credit, into the new program.
And businesses getting benefits from the Pine Tree program will continue to be eligible for the tax credit until 2035, officials said, although they could not also participate in the new incentive plan.
The bill to create the new program, which is still being written, will be sponsored by the top two Democrats in the Legislature: Senate President Troy Jackson of Allagash and House Majority Leader Maureen Terry of Gorham.
Mills said the Pine Tree program was created in 2003 to address high unemployment in the state. But now, with a labor shortage that means many high-quality jobs can’t be filled, she said the focus should be on helping businesses fill jobs that will offer employees a better future.
“Everywhere I go, business leaders tell me they need more workers. By incentivizing companies to make direct investments in worker training, and by targeting incentives to attract and expand promising, high-value sectors, we can tackle our workforce challenges and build a strong economy with better-paying jobs for Maine people,” Mills said in a statement.
Under her proposal, businesses that pay for training for three or more workers in an approved employee training program could get a $2,000 credit per worker trained. The proposal is to provide the credits for formal training, such as internships or community college courses, rather than informal on-the-job training.
The plan also would provide credits of up to 15% for businesses making capital investments in high-value sectors such as manufacturing, agriculture, fishing, logging and forestry, freight, software, and some professional services, such as scientific research.
The credits would be available in Cumberland, York and Sagadahoc counties, but in recognition that the southern Maine counties that had no Pine Tree Development Zones and need less help attracting business, the credit would be up to 7.5% there.
Although the tax credits will go to businesses, the new program should be attractive to workers because they will be getting advanced training in addition to jobs, Heather Johnson, commissioner of the Department of Economic and Community Development, said Thursday.
The Pine Tree program “was built when we just needed jobs,” she said. Now, “workers want to be more mobile and more productive, and this will help.”
The plan should help raise wages because trained workers will be able to command higher pay, she said, and it better reflects the current economic reality in Maine.
Johnson said the hope is to get the new measure passed by the end of the current legislative session, especially since it contains the provision to extend the Pine Tree Development Zone program beyond the end of the year.
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