Legislators will soon be voting on a request from General Dynamics, owner of Bath Iron Works, for an extension of tax breaks from the state of Maine, where they build destroyers. They are looking for similar subsidies from Rhode Island and Connecticut, where they build submarines at Electric Boat.
Their request of $60 million over the next 20 years continues a tax break they’re already enjoying from Maine’s taxpayers. It is money that could make a healthy difference in our state, where money for education, housing, health care, and alternative energy investment is scarce.
There are two vital factors to consider before reaching a decision.
1 — General Dynamics doesn’t have a compelling need for those dollars. Last year they paid CEO Phebe Novakovic $21 million, which included a $5 million bonus. Between 2013 and 2016 they spent $9.4 billion buying back their own stock. William Lazonick, an economist at the University of Massachusetts/Lowell and an expert on stock buybacks said: “I think, as taxpayers, we’re being taken for fools. At a minimum, I would have a rule saying, ‘You’re not getting any subsidies if you’re doing buybacks. You’re showing us you don’t need the money.’”
2 — Would Maine’s largest employer leave Maine without this extended subsidy? Given their huge local investment in buildings, materials, machinery, and most important a highly skilled workforce, that seems highly unlikely.
Please contact your state representative and senator with your viewpoint on this.