Summary and Analysis of the Conference
by Julie Sherman, M.B.A. Graduate Student, and George R. Violette, Professor of Accounting and Associate Dean, School of Business, both at the University of Southern Maine
Background
On Wednesday, March 22 of this year, the Greater Portland Chambers of Commerce and the Muskie School of Public Service hosted a breakfast to discuss Maine’s taxation system. The keynote speaker was Robert Tannenwald, an assistant vice president of the Federal Reserve Bank of Boston and an economist in its research department. A panel of four Maine gentlemen was included in the program to comment on Dr. Tannenwald’s points. The panelists were Joseph (Joe) Wischerath, executive vice presidnet of Maine & Company, John Keffer, president and owner of the Forum Financial Group, Christopher (Kit) St. John, director of the Maine Center for Economic Policy, and Charles S. Colgan, professor of public
policy at USM’s Muskie School. The general focus of the panelists’ commentary revolved around business attraction (Wischerath), business (Keffer), low income (St. John), and the local economy (Colgan). Elizabeth Mitchell, former speaker of the Maine House of Representatives, moderated the event.Analysis
If tax policy makers want input from experts, they should listen closely to this knowledgeable group. A consistent theme throughout the presentation was the need to identify what the state’s focus should be, and then set goals and measurements to track performance toward the overall plan. Care should be taken to avoid an all-or-nothing strategy. Growth in the business sector does not necessarily detract from humanistic needs fulfillment. Strong, growing businesses radiate wealth from employees, to suppliers of materials and services, to the tax bases, local, state, and federal. Many businesses invest heavily in infrastructure and most are quick to offer health-care benefits as soon as they can afford to. Moreover, most devote time and cash for employee development and training.
We would argue that taking special care of Maine’s existing businesses and business prospects is one of the best ways to take care of Maine’s people. Growth of business does not have to tarnish Maine’s beauty and purity. We can be a tourist state and a pro-business state. Fostering businesses that need highly skilled employees, while ensuring that our citizens have access (geographically and financially) to education and training, will do much to strengthen Maine families and offer hope for keeping young, talented, motivated graduates close to home. We should look closely at the Irish model as well as our Asian neighbors and their ultimate commitment to education as a guide to sustainable economic growth, much-needed population growth, and the strengthening of families and communities. Encouragement of business growth, particularly in rural areas, will help smooth out disparity in income and tax burdens and increase the use of underutilized infrastructure. If Maine had more businesses and more people holding well-paying jobs, then we would have more tax revenue overall and sufficient funds to lessen the burden on those least able to pay without overtaxing others.