My OpEd Against BIW Tax Giveaway Bill That Maine Papers Are Reluctant To Publish

I submitted versions of this opinion column to the Kennebec Journal's Maine Compass and the Bangor Daily News opinion page on January 14. An admin at the KJ called me the next day to confirm my submission, but the column has yet to run in either paper. So, I am self-publishing it here. 

* Note that since I wrote this piece, LD1781 has been revised to eliminate state tax withholdings by BIW from their employees as the source for the $60 million tax giveaway. It probably didn't sound too good to those of us who pay our fair share of state taxes via salary withholdings.

LD1781 tax giveaway for General Dynamics a bad idea

by Lisa Savage, Maine Natural Guard

The fifth largest weapons manufacturer on the planet has asked Bath legislators to sponsor a bill to shore up its already enormous profits. General Dynamics, which owns Bath Iron Works (BIW), wants Maine taxpayers to allow them to keep $60 million in state taxes withheld from their employees' paychecks each year.*

LD1781 is being sponsored by Rep. Jennifer DeChant and Sen. Eloise Vitelli on behalf of a corporation so wealthy that it has spent $9.4 billion since 2013 buying back its own stock. General Dynamics paid its CEO $21 million last year.

Last time General Dynamics got a tax gift from the state they claimed the money was needed for infrastructure that would allow them to remain competitive in shipbuilding for the Navy and provide jobs. But, despite tax giveaways by the state and the city of Bath, BIW cut jobs anyway.

Two years ago the Maine Department of Economic & Community Development commissioned a study by Investment Consulting Associates that evaluated the tax credit given in 1997 to BIW. The report's recommendations were not encouraging: “eliminate program or significantly alter it so that it applies to a broad selection of Maine’s shipbuilding community.” Their reasoning was that putting all of Maine's eggs into one basket -- Pentagon contracts-- was a bad gamble for the future of our state economy.

Inquiring minds may wonder why BIW is now seeking to retain its employees' state tax withholdings* rather than a reduction in its corporate taxes. Since neither the state nor General Dynamics will release tax records showing what's currently being paid, it's impossible to know but easy to guess that the amount they are currently paying is not much. So, relief from their taxes as a corporation is already in place, and they are now seeking yet another avenue to prosper at the state's expense.

As a working family in Maine, my husband and I pay a hefty tax rate on our income. If our tax revenue goes to maintain roads and bridges, care for the elderly, or provide health care for low income kids we are fine with that.

According to Maine Equal Justice Partners, there are about 43,000 Maine children growing up in poverty and of those 20,000 growing up in what is considered "deep poverty". They attend schools that have never been fully funded according to the Maine legislature's own goal of providing more than half the cost of public education; a recent study by the Center on Budget and Policy Priorities found towns spending 12% more on K-12 education while state spending was -9% from 2008-2015.

How can we justify giving a mega wealthy corporation whose executives are millionaires a tax gift at the expense of Maine's children?

The justification that Rep. DeChant offers is the same as usual: jobs. She wrote in an email to me on January 9, "Bath Iron Works is the largest employer headquartered in my District. There are 477 BIW employees who reside in Bath. When a constituent (corporate or individual) asks me to put in a bill, I do so."

But building warships is actually an ineffective jobs program. Research by economists at the University of Massachusetts, Amherst has repeatedly found that a $1 billion investment in various sectors of the economy -- building public transportation or energy efficient building components, health care, education, even tax rebates to individuals -- creates more jobs than the same investment in Pentagon contracting. The data included only full time, full benefit jobs in their reckoning in 2006 and again in 2011.

So that is a second piece of research indicating that tax giveaways for General Dynamics are a poor way to shore up the Maine economy.

Many Maine taxpayers are opposed to LD1781 and some of them met with the bill's sponsors at Bath City Hall on December 21. A videographer who wanted to record the discussion was turned away by Rep. DeChant, who now admits she made a mistake. Perhaps General Dynamics did not want constituents' objections to about the pending legislation to reach our ears?

Mainers have a right to information about tax giveaways at their expense, and they have a right to have a voices heard. The Taxation Committee of the Maine Legislature has not yet announced a date for hearings on LD1781. In the meantime, we can contact our own representatives and senators in Maine to say: no tax giveaway for General Dynamics.

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Here's the list of organizations opposing LD1781, which I could not fit on my cartoon:

350 Maine
Americans Who Tell the Truth (Brooksville)
COAST (Citizens Opposing Active Sonar Threats, Hancock)
Global Network Against Weapons & Nuclear Power in Space (Bath)
Greater Brunswick PeaceWorks
Green Horizon Magazine (Topsham)
Island Peace & Justice (Deer Isle)
Maine Green Independent Party
Maine Natural Guard (Solon)
Maine Veterans For Peace
Maine War Tax Resistance Resource Center (Portland)
Maine Women’s International League for Peace & Freedom (Brunswick)
Peace Action Maine (Portland)
Peace & Justice Center of Eastern Maine (Bangor)
Peace & Justice Group of Waldo County
Peninsula Peace & Justice Center (Blue Hill)
Resources for Organizing & Social Change (Augusta)