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Group Takes Stock of Maine Economy Six Years After Brookings Report
09/26/2012   Reported By: Tom Porter

Six years ago, The Brookings Institution, a major Washington D.C.-based think tank, released a report detailing the steps it said Maine needed to take to grow its economy without damaging the state's character, or sense of place. The report was called "Charting Maine's Future," and it made number of a recommendations. This week, the group that commissioned the study released a follow-up report, subtited "Making Headway" to check on the progress.

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Group Takes Stock of Maine Economy Six Years After Listen

The conclusion: "We're on the right path," says Nancy Smith, executive director of GrowSmart Maine, a non-profit that promotes "sustainable prosperity" among the state's business community. "And what we need to do is keep focused and keep consistent with the efforts that we've seen from the original recommendations."

Those recommendations included the establishment five years ago of a $200 million research and development bond, and expanding Maine's historic preservation tax credit, which offers tax breaks to companies renovating historically significant old buildings for residential or business use.

Smith says this program has proved its worth and should be continued. "At a time when with the recession when construction just wasn't happening, there was $200 million of investments in Maine, and when you're doing rehabilitation of old buildings, those are Maine jobs, and it's important that we continue to invest in these amazing places. It does reflect well on our economy."

John Coleman heads the Portland-based advertising group, the Via Agency - one of the 11 "success stories" briefly profiled in the GrowSmart report. Via is based in the imposing 19th century Baxter building, a former downtown library that was renovated with the help of the historic preservation tax credit.

In addition to continunig this particular tax credit, the report also recommands increasing the state's lodging tax. It's part of an overall package of tax proposals aimed at reducing income tax and boosting sales tax - particularly targeting out-of-state visitors such as tourists.

Nancy Smith says the three-point hike in lodging tax would mean more money for Maine's "Quality Places Fund" to revitalize communities, conserve natural resources and promote tourism.

"When people are visiting the state they are benefiting from our education, our road systems and all of the other general revenue investments," she says. "So it makes sense that they pick up some portion of those costs, relieving the tax burden on Mainers."

"The reality of an increase in lodging tax, or a proposal to increase the lodging tax, is that we are absolutely, unequivocally opposed to doing so," says Greg Dugal, executive director of the Maine Innkeepers Association. A tax increase, he says, would hinder the hospitality industry's continuing efforts to recover from the recent recession.

"Most hotels, inns and B&Bs have not been able to raise their rates since then, so for there to be a tax increase and that to be the increase that the state gets, I think would be something that they would be very upset with," Dugal says.

An increase in lodging tax was part of a host of tax proposals aimed at bringing down the income tax while raising the sales tax on a number of items that was soundly rejected by Maine voters in 2010.

Dana Connors, president of the Maine State Chamber of Commerce, says he's on board with the broad aims of GrowSmart Maine's tax recommendations. "Trying to broaden the sales tax, lower the personal income tax, are all sound policies," he says.

But "we shouldn't lose sight of the fact that it was just a couple of years ago that this principle, this very policy, was debated and pretty soundly defeated at that time," Connors says.

He says to jump back into the debate with a package of proposals similar to the one defeated two years ago would not be well-timed.

View the full report by GrowSmart Maine, called "Charting Maine's Future: Making Headway."


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