TWEET THIS goo.gl/bDXMYY
There is a noteworthy article in the Portland Press Herald by staff writer WHIT RICHARDSON
Pay Day At the Mill tells the story of how investors from out side the state lobbied the legislature to create new program Maine New Markets Capital Investment program, written by their own lawyers to include the ubiquitous refundable tax credit found throughout economic development programs devised by the Maine legislature
In the end, here’s what really happened: Two Louisiana financial firms arrived in Maine with a plan to create such a program, hired lawyers and lobbyists to get it passed in Augusta, then put together the Great Northern deal using one-day loans that made an $8 million loan look like a $40 million loan. While they claim they did this to leverage more investment, the result is that Maine’s taxpayers are going to pay $16 million to banks and investment firms that invested only half that amount. And all of it was legal. Whit Richardson Payday At The Mill
You can read the details of this story in the link above so I will not repeat it here myself
http://goo.gl/L8TEziThe Legislature finds that the incentives offered by the State pursuant to this subchapter are intended to induce major investments in qualified businesses and developments located in economically distressed areas of the State and that any party who accepts and reasonably relies upon these inducements in making qualified investments is entitled to the full realization of these incentives without impairment by subsequent changes in law. Quoted from New markets bill
The Maine New Markets Capital Investment program is based on the federal New Markets program A difference between the federal program and the Maine program is that the federal program does not allow refundable tax credits but the federal program does allow one day loans.
“So were mortgage-backed securities that turned out to be backed by unsustainable mortgages,” said Dick Woodbury, an economist and former state legislator from Yarmouth, after the details of the deal were explained to him. “I’m really angry to hear how (the Maine New Markets tax credit program) has been used, and it has made me incredibly cynical about nearly any tax credit program and its potential for profiteering motives over genuine state interests.” ........The federal program also has its critics
“Essentially, it just facilitates a sort of crony capitalism,” said William McBride, chief economist at the Tax Foundation, a right-leaning think tank. “A lot of these highly targeted tax credit programs are a way to funnel cash out of the general coffers and into some very, very select special interests.” The fact that Maine made its tax credits refundable means the program is “extra dangerous,” McBride said. Pay Day At the Mill
While researching this post I decided to look up the original bill to find out how the vote went down and I came upon something quite baffling. According to the bill status, of 125th Maine Legislature, First Regular Session An Act To Establish the Maine New Markets Capital Investment Program, it died on adjournment- and yet there is a statute of the same name dated 2011
This I cannot explain ! I published this info on a recently published Portland Press Herald article but my comment was removed. I emailed this information
to Whit Richardson, which was returned without being delievered.
Update About 7 PM. I found the above page by first searching for the Bill. At the top of the Bill is a link that says "Bill Tracking". I clicked on the link and got to the page above. The page to which "Bill Tracking" links has now been changed to the one below which does not say that the bill was enacted but it makes it less obvious that it was not enacted by reporting instead about the committee recommendation that it "Ought To Pass". I have looked for the members of of that committee but I haven't found it yet.
It is reasonable to surmise that if the page to which bill tracking links is changed after the fact of pointing out that the original page reported that the bill died and it is not changed to a page that says the bill was passed by a vote in both houses- then it must not have been passed by a vote in both houses. It is standard that the legislative links report on the votes in the House and the Senate as did the page to which"bill tracking" originally linked. Now we see a page reporting on decisicons made by an unidentified committee.
This is the equivalency to the replacement of municipal governments elected by the inhabitants of the municipalities with boards appointed by the state in the municipal corporations of MRRA and Lorring. Both towns go by the names of regional development "agencies" when in fact they are chartered as municipal corporations serving an area defined by their own municipal boundaries. MRRA and Lorring were both chartered by special acts of legislation but do not satisfy either exception to the constitutional prohibition against the legislature chartering corporations by special acts of legislation found in Article IV Part Third Section 14 of the Maine Constitution. Nor do they satisfy the Home Rule Amendment that requires the legislature to provided the process by which the inhabitants of a municipality can conduct their own elections and yet these two towns are specific regional targets of the Pine Tree Zone corporate welfare program after it was transformed in 2009.
This is just another instance that validates my own view that Maine has been transformed from a state governed by its constitution to a corporation largely governed by global capitalism- although in this case it is being governed by American capitalism. Under our constitution a "committee" does not have the authority to pass a law. That authority belongs to the combined consensus of the House and the Senate. There appears to be a missing vote by the Maine Senate in establishing this law. The question is why is the Senate silent on this? This is a usurpation of the authority of the Senate. Did the committee decide that if the House has approved the bill that is all that is needed? Why would the entire Maine Senate allow this to happen and say nothing?
UPDATE 4.24 2015 - To day the bill tracking link on the bill links to the original page again0 but I am leaving this post as is - recording the changes online and my responses to those changes as they occured The essential point remains the same: The bill status says that the Senate never voted on this bill and yet it has been published into law
Below is a screen shot is from the Summary. It shows that the House passed the bill but the Senate adjourned and so it was pronounced DEAD. There are dates for last enactment- which means "last enactment"
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| No fiscal Impact report for this bill- testimony link just jumps back to search page ! |
As Pay Day at The Mill explains there was concern at the FAME Corporation over the one day loans and part of the reason for going along with it is that the federal program allows one day loans- the difference being that the federal program does not permit refundable tax credits,( I recently updated a post on refundable tax credits first written in 2013 found HERE).
But the Maine legislature does not want to give up its refundable tax credits which is the life blood of the corporate state's redistribution of wealth system and a device that allows them to ignore all constitutional limits on dept and/or requirements for public approval as they reach into tax payer pockets and transfer the money extracted to private capitalists. The Maine legislature justifies this by the claim that investors will not invest in our beautiful state with out bribes financed by the sector of the economy excluded from corporate welfare benefits. The system allows the so-called representatives of the Maine people to play at being Masters of the Universe- to redesign all of Maine to their own specifications and burden the taxpayers with footing the bill although the taxpayers have no say in the investments what so ever. Refundable tax credits have no provision requiring public approval.
In a more recent article we find the legislature ready to make changes in response to the fraud committed upon the Maine people due to their own actions. They want to double up on the limit for refundable tax credits for the New Markets Investment Program
A bill to double the investment cap of the Maine New Markets program from $250 million to $500 million got a unanimous vote from the Labor, Commerce, Research and Economic Development Committee in early April. The Finance Authority of Maine, which administers the program, included a provision in the bill to prohibit the use of one-day loans from the New Markets deals, a tactic used by the investors and their middlemen to inflate the value of the deal and trigger the largest award of tax credits. Maine leaders want changes to tax-credits programThe article goes on to say:
Cate Street and the project’s investors do not appear to have broken any laws because the 2011 bill does not impose requirements on how taxpayer money would be spent or any mechanism for ensuring the money is invested in the local community. Pressed on the lack of accountability in the law, Eves said Cate Street “went well outside of what the program was designed for.”Maine leaders want changes to tax-credits program
Notice the lauguage? the 2011 BILL does not impose requirements but a BILL is not a law untill it is passed. According to the Maine Constitution a vote of approval of both houses is needed to pass a bill into law. The constituion represents the consent of the governed who are the ones being made to foot the bill. Without a vote by both houses- who allegedly represent the governed- the bill has no legal authority. It is the equivalency of a legal contract between two parties but only one of those parties has signed on in agreement ! Did the authors of this article intentionally use the word "bill" as opposed to"statute" or law"? The statute is indeed published and there in lies the appearance of a broken law. Has the public-private hegemony that unofficially runs this state become so arrogant that they believe they can just expedite the publishing of a law without the required vote of both houses ? Apperntly so ! I guess they were in a hurry to get this deal through ! Step aside Rule of Law! You're in our way !
This Maine Biz article is typical of the way the Maine media sells the refundable tax credit to the public. Notice that the tax credit is described as "a credit against their state taxes, up to 39% of a project's total cost." - no mention of the fact that it is a refundable tax credit ! Also notice that it is told solely from the perspective of those standing to gain from this deal. No mention of the lowly tax payer who are merely pawns in the game !
An impact statement prepared by CEI Capital Management LLC and based on a December 2014 report compiled by economist Charles Colgan concludes that for every $1 million of New Markets credits claimed, an estimated $1.56 million will be returned to the state's General Fund. Additional data shows that for every $1 million in credits claimed, an additional $3.43 million in private capital investment was brought to Maine.New Markets tax credit program needs higher cap
BY JAMES MCCARTHY
Who knows how they come up with their statistics but the last sentence is mere word parsing- it means the investors get an investment partner requiring no share in the profits worth 1 million for every 3.43 million that they invest but at a tax credit of up to 39% makes the math a little fuzzy.
This story of private capitalists writing the law themselves for their own benefit- is an old one in Maine with a long history as this one dated 1977 shows:.
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