Corporate subsidies in Maine : what Mainers got for their money

Abstract

New legislation in the State of Maine mandating the disclosure of business incentive payments by the State to private businesses has made possible an examination of how this money was spent. An analysis was conducted on publicly available data, which were derived from reports filed by 188 companies that received subsidies from the State of Maine in 1998. Because of significant flaws in the data, generalizations are hazardous. However, three major sets of findings were evident: while the major goal of the program was job creation, followed by job retention, most of the money spent on business incentives was could not be linked to specific job retention or creation numbers. Of money that was associated with a job retention or creation claim, much more money was spent on retention, and many more jobs were retained than created. Second, job creation was, consistent with stated goals, concentrated in areas of the state outside the typically more prosperous southern coast region, although overall investment was not. Finally, the programs show a defacto strategy of industrial retention, although this goal was not an explicit strategy by the State. While a conventional strategy for economic development, it is important that the goals of the program emerge from public consensus. Recommendations include further research to refine self-reported claims of job creation and retention, improvements in reporting requirements, more explicit targeting of incentive programs, and more extensive accountability measures to ensure that Mainers are getting a good value for their money.