During Visit to Innovative Saco Business, Governor Mills Urges Legislature to Pass Dirigo Business Incentive Program

Failure to replace the expiring Pine Tree Development Zone Program before the Legislature adjourns would leave Maine without a competitive business incentive

Saco, MAINE – Governor Janet Mills today visited Tanbark Molded Fiber Products in Saco where she urged the Legislature to approve her Administration’s proposal to replace Maine’s expiring Pine Tree Development Zone (PTDZ) program with a new program, the Dirigo Business Incentive, that better reflects the current needs of Maine’s economy.

The Dirigo Business Incentive, unveiled by Governor Mills in April, would replace the 20-year-old PTDZ with a new program designed to tackle two major challenges facing Maine’s economy: lack of appropriately skilled workers and a need for increased capital investment. The proposal has bipartisan support and was unanimously approved by the Legislature’s Committee on Innovation, Development, Economic Advancement and Business last week. Funding to support the program was included in the Governor’s change package and is under consideration by the Legislature’s Committee on Appropriations and Financial Affairs.

During her visit to Tanbark, a rapidly growing producer of high-end sustainable packaging made from Maine’s heritage pulp and paper industry, Governor Mills promoted the new program as necessary to meet the challenges facing Maine’s economy right now and warned that failure to pass the Dirigo Incentive Program before the Legislature adjourns would leave Maine without a competitive business incentive when the PTDZ program expires in December.

“If we want to keep Maine competitive with other states that are working aggressively to attract businesses, then we simply cannot be without a business incentive program. Maine will be at a significant disadvantage if the Legislature adjourns without replacing the expiring Pine Tree Development Zone Program,” said Governor Janet Mills. “The Dirigo Business Incentive Program is exactly what Maine needs right now. It will spur direct investments to train more Maine people to tackle our workforce shortage and deliver capital support that is crucial to keeping our state competitive for businesses looking to relocate, start, or expand – all of which will strengthen our economy. I urge the Legislature to pass this program without delay.”

“Many Maine businesses have pointed to our state’s business incentive program as a reason they were able to make significant, job-creating investments,” said Heather Johnson, Commissioner of the Maine Department of Economic & Community Development. “The Dirigo Business Incentive will address shortcomings in Maine’s current incentive program and keep our state competitive for years to come.”

“Maine’s business incentive program is a key reason that Tanbark has been able to create ten new jobs here in Maine—and we’re still growing,” said Melissa LaCasse, CEO of Tanbark Molded Fiber Products. “The Dirigo Business Incentive Program will help innovative companies like Tanbark to create jobs in Maine and help us train the workers we need for continued growth.”

Business and economic leaders joined the Governor in calling for the approval of the program:

“The Maine State Chamber of Commerce sees the modernization of the Pine Tree Zone incentive program as key to future growth,” said Julia Munsey, President and CEO of the Maine State Chamber of Commerce. “The Governor’s Dirigo Incentive Program will focus on capital investment and workforce, two key issues for Maine businesses.”

"I have worked in economic development across the US for more than 25 years and I have seen many approaches to incentive programs. The most efficient, successful economic development programs are those that are clear and simplified to support workforce training and that are tied to a state's strategic plan," said Jay Brenchick, Director of Economic Development at the City of Auburn. "That is exactly what the Dirigo Business Incentive is. It's tied to targeted industries, it's tied to the state's strategic plan, and it's tied to capital investment. This program is a common-sense approach, and it is simple for businesses to understand and use."

“Although we have had significant impact and successes helping businesses start or grow, we feel there is still tremendous opportunity in Somerset County and more we all could provide to assist our businesses in rural Maine,” said Christian Savage, Executive Director of Somerset County Economic Development. “The Dirigo Business Incentive program will be more accessible to small and medium-sized businesses that are an important part of growth in Maine’s more rural areas, while still providing value for the larger businesses that anchor our county’s economy.”

“The modernization of the Pine Tree Development Zone program represents a pivotal mechanism for economic development, imbuing the state with the capacity to retain, expand, and attract businesses, ensuring Maine's competitiveness in the regional, national, and global arenas,” said Garvan Donegan, Director of Planning, Innovation, & Economic Development at Central Maine Growth Council. “Its benefits extend beyond business growth, overlaying locally to support human capital and workforces, drive innovation, and stimulate new construction to equipment purchases. It is truly the most important tool in our economic development toolbox, enabling Maine to thrive in an ever-evolving economy.”

“These incentives would meaningfully support the innovation economy here in Maine,”said Trevor Kenkel, Founder and CEO of Springworks Farm. “Training and infrastructure development will foster entrepreneurship and help growing businesses reach their next milestone.”

“FocusMaine supports the State of Maine's efforts to modernize its business incentive program as it is in strong alignment with FocusMaine's mission to accelerate the growth of Maine's food and biotech industries and create quality jobs to build a thriving, future-ready economy,” said Dana O’Brien, President of FocusMaine. “The Dirigo Incentive program helps realize this goal by attracting and supporting businesses in key sectors of the economy and connecting talent to sustainable career opportunities.”

“The administration’s new plan is exciting. While the original Pine Tree Zone was very effective and appropriate given the time it was written, it was time for a program that recognizes the economic realities of the current day,” said Peter DelGreco, President & CEO of Maine & Co. “Efforts to stimulate capital investment and workforce training aligns with the Governor’s 10-year economic development strategy and is the right way to build and grow an economy.”

The Pine Tree Development Zone Program was created in 2003 during a time of high unemployment, with the primary focus being to create jobs to lower unemployment. Today, however, there are two available jobs for every person seeking a job in Maine. One of the greatest difficulties facing employers, and Maine’s economy more broadly, is no longer job creation – but, rather, the inability to fill those jobs with appropriately skilled people and to create a pathway towards higher-wage jobs in higher-value industries. Additionally, Maine’s economy needs continued additional private sector capital investment. These significant investments in physical infrastructure, like buildings or equipment, help businesses expand and create and sustain good-paying jobs.

The Dirigo Business Incentive Program proposes to tackle these challenges through a two-pronged approach that: 1) encourages businesses to train more people to succeed in the workforce by investing in qualified worker training programs; and 2) attracts and expands businesses in promising, high-value sectors through tax credits for capital investments.

Under the proposed legislation, businesses that pay to train three or more workers in an approved employee training program – such as an internship or community college training – could receive a $2,000 tax credit per worker trained. Furthermore, businesses across most of Maine could receive up to a 15 percent credit for a capital investment, or a 7.5 percent credit for York, Cumberland, and Sagadahoc counties. This will make York and Cumberland counties entirely eligible for investment that they are generally not eligible for under the current PDTZ program. These credits are specifically targeted towards high-value sectors and industries – including manufacturing, agriculture, fishing, logging/forestry, freight, software, and certain professional services like scientific research – to attract and expand high growth sectors for Maine.

Modernizing Maine’s economic development benefits to tie them directly to capital investment and workforce training, rather than new job creation, will allow Maine businesses to invest with confidence, keep Maine competitive with other states, improve the state’s workforce, and strengthen the economy.