Testimony of Nancy Smith, Executive Director of GrowSmart Maine
in favor of LD 1730,
“An Act To Require the Review of Proposed Tax Expenditures”
February 2, 2012
Senator Courtney, Representative Knight and members of the Joint Standing Committee on Taxation, my name is Nancy Smith and I am the Executive Director of GrowSmart Maine. As many of you know from our previous interactions with the committee, GrowSmart Maine is a statewide non-profit organization working at the intersection of economic development, community revitalization, and natural and working land conservation. I regret that previously scheduled commitments prevent me or other GrowSmart Maine representatives from presenting this testimony at today’s Public Hearing.
As a part of our commitment to strengthening Maine’s economy, GrowSmart Maine is particularly enthusiastic about well grounded, thoughtful proposals which seek to grow the economy in a sustainable manner while at the same time protecting our state’s unique character and quality of place. We believe this bill fits that description. It is noted in the landmark 2006 report Charting Maine’s Future, commissioned by GrowSmart Maine, “this report affirms Mainers’ abiding intuition that economic success and quality places matter equally and can be fostered by effective, frugal government.”
In my eight years as a state legislator, we debated numerous efforts to evaluate the impact and cost of tax incentive programs, but made little progress. We even looked at the legislative process, hoping to encourage more collaboration between legislative policy committees to measure the value of tax policy proposals. I endorse this bill because it does provide a comprehensive, thoughtful approach to accomplish these goals.
Several components of this legislation are particularly noteworthy: the inclusion of a broad range of potential impacts to be considered, the repeal date and evaluation process at that time so that a review of the true impacts is necessary for a tax policy to continue, and the process by which the Taxation committee reviews each bill with proposed tax incentives, once the policy committee of jurisdiction has endorsed the legislation.
Last year, GrowSmart Maine led a broad coalition that appeared before this committee proposing the elimination of the sunset on the Historic Preservation Tax Credit (HPTC) due to its impressive success. Many of the potential impacts outlined in LD 1730 were a part of the economic impact evaluation brought forward by the coalition to support this change. In the end, this committee and the legislature made the sound decision to extend the sunset by ten years. This too is in line with the process now under consideration in this bill.
One caution I would offer is to ensure that the repeal date of tax policy is out far enough to provide a predictable regulatory environment required for planning, investments, and action. As we learned with the HPTC, developers require a planning window of at least five years due to the complexity and time commitment inherent in the rehabilitation and reuse of historic buildings.
Thank you for the opportunity to provide these remarks. Please feel free to contact me with any questions regarding GrowSmart Maine’s support for LD 1730.
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