The state will decide who is business-friendly
Republicans tend to dislike governments assisting some businesses over others, calling it “picking winners and losers.”
Recently, however, Republican Governor Paul LePage appears to be doing the same, but when it comes to state support for economic development in different localities.
In late October 2011, he made a proposal that, as reporter Eric Russell put it, “appear[ed] to drastically reduce local control.”
“I’m a big believer in trying to get the state regulations no stricter than federal, and we’re trying to encourage the local communities to work with us to make their rules no stricter [than either],” said the governor after hosting the second of his job creation workshops. “If you will not cooperate with the state, [if you are] stricter on regulations, then you lose revenue sharing. Obviously, you don’t need the revenue.”
After the idea received pushback from many groups, the governor recently rolled out a new proposal. Rather than taking away revenue from some, Governor LePage would have the state promote localities that share his preferred approach to regulation.
As journalist Matt Wickenheiser put it, “Instead of penalizing communities with stricter regulations, LePage proposed partnering with any willing communities to help them develop “fair” regulations, and promoting those towns and cities as “business-friendly.”
How would this work? According to reporter Steve Mistler, Governor LePage told a job creation forum that “he hoped to start a program called Business Friendly Communities within the state Department of Economic and Community Development. The program, the governor said, would essentially create incentives for towns to keep their regulations in line with the state.”
Now, you may be thinking: Well, haven’t there been programs which would emphasize business developments in certain towns or parts of the state?
And the answer is: Sure thing.
One economic development strategy involves “empowerment zones,” which offer particular programs and an tax incentives for that area.
But keep something in mind: Empowerment zone areas were designated based on the area’s needs.
The Aroostook County Empowerment Zone (ACEZ) was designated as a new Zone in 2002 under the EZ Program’s outmigration criteria; with the region qualifying as a result of the large population loss experienced since the 1960’s. With the closure of Loring Air Force Base in 1994 and the ongoing changes in the potato industry – the traditional economic engine of the region – this population loss accelerated.
In contrast, the Business Friendly Communites program would not act to assist communities’ based on need, but on their compliance with the state’s view toward regulations.
If localities want the state’s support, they would have to follow the state’s vision of what makes an area business-friendly.