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Kestrel Aircraft loses federal funding at MRRA and leaves Maine for a Juicier Deal.

Kestrel Aircraft eyeing Wisconsin for new mfg. facility

This story tells the story of what is happening not only in Maine but in this country. At some point one state had the grand idea of offering large company's tax breaks to locate in their state which grew to  a competition among the states, led by the transfer of wealth to the federal government, which then is re-distributed back to the states. Not only do the states have to offer state tax incentives but federal money as well and the ante keeps going up as each state tries to have the competitive edge over the other.

This article doesn't explain why the MRRA lost it"s federal funds to grant to Kestrel Aircraft . I guess Maine Biz either has no curiosity or doesn't believe that the tax payers need to know. Could it be because the legislature chartered the MRRA as a "municipal corporation" and then chartered it as an "instrumentality of the state" creating complications for federal funding which cannot go to local governance? Maybe the feds read the charter???? Whatever the reason, the MRRA is almost entirely funded by the taxpayer so maybe we should know what happened but apparently the Maine media - or the government- doesn't think we should have that information as it is left out of the stories that I have read.

After trying to amend the charter of this corporation so that it would exclude all local government, after losing the federal funding ( for whatever unstated reason) the state then tries to get the funding through Franklin County, (local governance)- this after the legislature succeeded in excluding all elected Brunswick officials off of the board of the MRRA. I am sure that helped them to get the local funding!

What is the funding for ? - the big tax breaks that all big companies expect to be offered these days to locate any where, meaning that the rest of the economy has to carry them on their backs. (note added later- there was also some discussion that Kestrel is leaving due to Maine's high energy costs, although I had heard that a decline in federal funding was involved ). I  am surprised that this company didn't qualify for the newly transformed Pine Tree Zone which caters to companies that hire 500 or more people and offers them up to 100% deductions on corporate and personal tax plus an 80% "tax credit" ( meaning paid by Maine taxpayers) on their federal payroll tax. Could it be because this company employs only 300 people? The transformed Pine tree Zone never actually states that the company has to employ more than 500 people- but that is the only size of business mentioned.

Maybe its about time we demanded some "innovation" from our state government to come up with some new ideas about how to stimulate the economy other than giving all the big companies tax breaks and dumping the cost on the rest of the economy.

CORRECTION: I just reviewed the Pine Tree Zone Legislation and found that the the number of employees mentioned is 250 and not - the 500 figure actually relates to the loss of jobs to qualify high unemployment that were in the original Pine Tree Zone Legislation. The transformed Pine Tree Zone essentially reconfigures the "targeted sector" of the original legislation from areas of "low income and high unemployment" to favoring companies employing upwards of 250 employees. If you factor in that the legislature's goals have been to create "quality jobs" - which,from compounded readings of numerous acts, means jobs with high pay and the best benefits fo the "targeted sector", The "targeted sector" for the Pine Tree Zone is found at DEDC, the Government 's Office of Business Development
  • Biotechnology
  • Aquaculture and Marine Technology
  • Composite Materials Technology
  • Environmental Technology
  • Advanced Technologies for Forestry and Agriculture
  • Manufacturing, including Precision Manufacturing
  • Information Technology
  • Financial Services

    Since these are jobs for which the training is usually extensive it is obvious that if such a company should locate in an impoverished region of Maine,which are typically areas of high unemployment and low income,  that the effect would be to raise real estate values and property taxes and to drive out the existing populations that lack the specialized training for the "targeted sector" jobs that are the beneficiaries of our legislature's redistribution of wealth strategies. Ironically it is that sector of the economy that is relegated to "the un-targeted' sector of the economy and defined by default as the "un-creative classes" and "the non-innovative economy" that must actually create wealth in order to survive. In the eyes of state capitalism, whose function is to redistribute wealth and to concentrate it in the "targeted sector" the definition of "creativity" excludes wealth creation, which government bureaucracies do not and cannot do.


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