When the Maine Legislature Openly Plotted to Undermine the Maine Constitution

Refundable tax credits (redistribution of wealth) came into use in the USA in the mid seventies. Look what happened. Is it time to start letting the economy manage its self?

Quote from a Facebook conversation about the New Boothbay Round About:

Here's the deal. I don't care one way or another whether there is a frigging roundabout or not but i do think we need to look twenty or thirty years forward when we plan because growth is coming whether we like it or not. I'm not pushing it but i accept that it is coming. A threat? No just just that we haven't even begun to see the changes that will come. Apparently you all have mistaken me for someone who actually gives a shit what happens on the peninsular . as long as my property increases in value I'm good- local Boothbay person on Facebook

Many people and politicians conflate economic development with increasing property values. In that case the town is nothing more than a business investment for its stock holders (property owners) and economic development is only that which benefits property owners, a special interest group.

However, our constitutional form of government grants all inhabitants of the municipality, a vote in town matters. Maine has been a home rule state since 1969.  The Home Rule Amendment grants the power of municipal referendums, which Governor Longley's board of 1976 sought to eliminate.

Municipal Home Rule (1969)
Section 1. Power of municipalities to amend their charters. The inhabitants of any municipality shall have the power to alter and amend their charters on all matters, not prohibited by Constitution or general law, which are local and municipal in character. The Legislature shall prescribe the procedure by which the municipality may so act.

 Section 2. Construction of buildings for industrial use. For the purposes of fostering, encouraging and assisting the physical location, settlement and resettlement of industrial and manufacturing enterprises within the physical boundaries of any municipality, the registered voters of that municipality may, by majority vote, authorize the issuance of notes or bonds in the name of the municipality for the purpose of purchasing land and interests therein or constructing buildings for industrial use, to be leased or sold by the municipality to any responsible industrial firm or corporation. (emphasis mine)

The Task Force for Economic Redevelopment, Recommended Legislation for an Economic Development Program -110th Congress, called for the elimination of local referendums on municipal bond issues without identifying that the source of the power the Legislature sought to eliminate is the Maine Constitution, which every Maine legislator and governor takes an oath to serve.

2: eliminate the requirement for a local referendum on municipal bond issues (emphasis mine)

(The Report on the Governors Task Force of 1976 is not available on line but can be requested from the Legislative Law Library)

Astonishingly,  Seven Years after Maine became a constitutional home rule state, the Maine Legislature is on record as plotting to undermine  the municipal referendums provided by the home rule amendment.

This was the era when the Maine economy became centrally managed by and for public private relationships. The new system of government was created with the intent to over ride the Maine Constitution as the Report on the Governors Task Force of 1976 declares by the nature of its two primary goals. The source of the power of the authors of Maine's new public-private government is the Maine Constitution, but in order to implement a centrally managed economy by public private relationships, it was necessary to over write the Maine Constitution. Today we have statute after statue written for government by public private relationships, the method by which public funds for the Department of Transportation are distributed being but one example.The power group which initiated this change was the  Longley board, composed exclusively of the leaders of the wealthiest businesses in Maine. It is well worth requesting the Report of the Governor's Task Force of 1976 from the Maine Legislative Library. In my opinion it is a blatantly self serving document written in the interests of the wealthiest among us.

The author of the Facebook quote above suggest we think thirty years ahead. We cannot  know what changes will incur in the world in thirty years but the future of 1976 is unfolding in the contemporary moment. 

The Governor’s Task Force report recommended that two complimentary corporations be chartered by the Legislature, The Maine Capital Corporation and the Maine Development Corporation. The statute chartering the Maine Capital Corporation would attract stockholders by offering a 50% refundable tax credit, accompanied by a 100% tax exemption. The board used the following rationalization to justify funding a private investment company to the tune of 50% with taxpayer money:

This impediment ( lack of capital) to the development and expansion of viable Maine businesses affects all the people of Maine adversely and is one factor resulting in existing conditions of unemployment, underemployment, low per capital income and resource underutilization. By restraining economic development, it sustains burdensome pressures on State Government to provide services to those citizens who are unable to provide for themselves.

To help correct this situation, it is appropriate to use the profit motive of private investors to achieve additional economic development in the State. This can be accomplished by establishing an investment corporation to provide equity capital for Maine businesses and by establishing limited tax credits for investors in the corporation to encourage the formation and use of private capital for the critical public purpose of maintaining and strengthening the state's economy. The Governor's Task Force of 1976

This philosophy which justifies tax payer subsidization of the upper crust of the economy, and the transformation of our constitutional form of government into government as a state investment company in partnership with special private interests- aka oligarchy, has been advanced and entrenched by every administration and congress since. Central management is another name for totalitarianism, thus central management seeks to undermine local government and drive all components of society to be governed by central management (the state). Today it is hard to tell the difference between a private non-profit and government as all organizations follow the money orbiting the state investment bank. Government, using taxpayer money as pawns in the game can offer deals with which no private investment bank can compete.

This system has created targeted sector economics, which implies an un-targeted sector, "quality jobs", which implies that there exists jobs with no redeeming quality, and "certified retained businesses" which implies businesses that are selected to be discontinued by the overlords of central management.The government by public-private relationships system has created a class society that is not far different than communism as depicted in the current NetFlix drama, The Same Sky.Those who serve the state agenda are rationed the best perks-the real meaning of "quality jobs". Jobs serving in the State's industrial armies are just as subsidized as general welfare, but they are glorified, where as the growing population dependent on general welfare, which has increased as the middle became the beast of burden subsidizing both the top and the bottom, are denigrated. The top of the system is exploitative and the bottom is oppressive, designed to keep those at the bottom exactly where they are. We see this reflected in the Boothbay region rental housing situation. Houses which were once first homes are now summer homes or rented out as vacation rental, while the JECD's solution to the lack of homes for year round residence is "place more under one roof"- grid housing, which is usually highly regulated. Now that Boothbay has its own turnpike, perhaps we can  build some skyscraper boxes on the peninsula- that's looking thirty years ahead!

A system in which there are winners and losers cannot be said to serve the common good. Among the citizenry the only winners are those who land the high paying jobs targeted by the Legislature. General taxpayers must cover the burden of capitalizing the high paying jobs. The taxpayers of Maine do not see an individual benefit from the burden they share other than what hypothetically occurs through the trickledown effect, but the burden of costs also have a trickledown effect. In targeted sector economics, the bottom half of the economy subsidizes the upper half of the economy It is not surprising that the gulf between the haves and the have nots has increased in Maine and across the USA since the late 1970's when refundable tax credits first came into use.

The Economic Policy Institute (EPI) found that between 1979 and 2011, the top one percent in Maine captured 60 percent of all income growth

Between 1979 and 2007, the top one percent took home well over half (53.9 percent) of the total increase in U.S. income,” the EPI report found. “Over this period, the average income of the bottom 99 percent of U.S. taxpayers grew by 18.9 percent. Simultaneously, the average income of the top one percent grew 10 times as much— by 200.5 percent.

…EPI reinforces MECEP’s own analysis which shows that wage inequality in Maine is growing,” Martin said. “While Maine has some of the lowest levels of income inequality among states, the economy continues to fail too many hard working Mainers who are experiencing very little income growth. MECEP’s report, The State of Working Maine in 2013 , released in November 2013, highlights this fact showing that between the late 1970s and the mid-2000s, the average income- after federal taxes and programs such as food stamps -for the poorest fifth of Maine households grew just 27 percent, from $18,720 to $23,825 Middle-income households fared slightly better, growing 47 percent over the same period. Meanwhile, average income for the top 20% of Maine households grew by 67 percent. Maine Center For Economic Policy February 2014 [

Factor in that the purchasing power of the dollar decreased by 70% between 1979 and 2007.

I am not a tax accountant, however I will point out that the analysis counts welfare programs for the bottom as income but makes no mention of corporate welfare programs for the top. Corporate taxes are often passed through as individual taxes and so the question becomes, is the divide even greater than is reported if welfare is reported as income for the bottom but corporate welfare is not reported as income for the top ? 

Now we see the JECD group making vague references to the 73 stakeholders, a term that sounds very similar to stockholders. The JEDC group tells the public only what it wants them to know and that does not, to my knowledge, include the identity of the 73 "stake holders" Least of all does the JECD share with the public any information about the terms of agreement between the JECD and the "stakeholders". Private privacy is protected in government by public private relationships.