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BIW Tax Break Proposal Meets Local Opposition
11/14/2013   Reported By: Tom Porter

Members of the public filled Bath City Hall Wednesday night to discuss the City Council's pending decision on whether to grant millions more dollars in tax breaks to Bath Iron Works. The mid-coast shipyard builds, among other things, hi-tech destroyers for the U.S. Navy, and is seeking further tax incentives from the city of Bath to make improvements to its facility. But the proposal is meeting some opposition. Tom Porter reports.

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BIW TIF Proposal Meets Opposition
Originally Aired: 11/14/2013 5:30 PM

Wednesday night's meeting was organized by a group called Bath Citizens for Responsible TIF Action, which opposes granting any more so-called tax increment financing - or TIF - deals to BIW.

The group's Jerry Provencher says the forum was organized to give area residents more information about the process prior to a public hearing before the City Council next week.

"We wanted to provide an opportunity for citizens to be able to ask questions of knowledgeable people and hopefully get a response," Provencher says.

Among those experts was University of Maine Law Professor Emeritus Orlando DeLogu, who told the meeting he is not a fan of TIFs because they don't do the fundamental thing that they are expected to do, "which is to increase employment and/or to maintain a level of employment over a future period of time."

He points out that when BIW, which is owned by General Dynamics, entered into a TIF agreement with the city back in 1997, it employed about 7,700 workers. Today, the workforce is around 5,000.

Jerry Provencher, of Bath Citizens for Responsible TIF Action, says this amounts to corporate welfare which brings little benefit to the city of Bath. In the last 13 years, he says, the city has given BIW more than $50 million back in tax subsidies.

"And in that same time, our infrastructure, our roads, are crumbling, the local high school is in fear of losing their accreditation because it's in terrible shape," Provencher says. "We just took out $7.5 million in bond issues to repair our roads and repair our high school."

Furthermore, he says, BIW is one of only two shipyards of its kind in the country, and as such will remain in business regardless of whether it gets municipal tax incentives.

In its latest proposal, BIW wants a tax break totalling more than $6 million over 25 years to help it carry out what it says is important modernization work.

Whether you love corporate tax breaks or hate them, they're a fact of commercial life, says Joel Johnson. He's an economist with the Maine Center for Economic Policy, and another one of the panelists in Wednesday night's forum. Johnson made a case that TIF agreements can benefit a community, under certain conditions.

"The best that I can offer is that you get as much information as possible, and you advocate for public policies that require the maximum amount of disclosure, accountability and clawback provisions with any sort of tax subsidy like this," Johnson said.

BIW declined an invitation to take part in Wednesday night's forum. But company counsel Jon Fitzgerald told MPBN that tax incentives are an essential part of staying competitive. "We rise or fall here in Bath based on our ability to win competitions," he says.

Fitzgerald says the Navy is ordering half the number of ships that it was a decade ago. "So every bit of work that we don't win translates to the number of people that don't go to work here in Bath."

The Bath City Council is expected to vote on the proposed tax incentives after a public meeting next Wednesday, Nov. 20.


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