SOUTH PORTLAND — Elected officials in South Portland, Portland, Scarborough and Westbrook are hoping state lawmakers will expand a tax incentive program designed to lure more businesses to the state.
The South Portland City Council unanimously approved a resolution asking legislators to expand the Pine Tree Zone to Cumberland County. However, some councilors predicted a battle between rural and urban caucuses.
“I get visions of the two Maine’s duking it out over this one,” Councilor Thomas Coward said.
Eight Pine Tree Zones, totalling 300,000 acres in more than 100 communities, were established in 2004 as a way to encourage business development.
Businesses that relocate from outside the state to a Pine Tree Zone receive a 10-year reduction in taxes and insurance premiums through exemptions, reimbursements and credits.
Assistant City Manager and Economic Development Director Erik Carson said South Portland, along with other Cumberland County communities, would be a natural fit for the zone, since there is already a base of the industries the program seeks to lure to the state.
Those industries include information technology, biotechnology, precision manufacturing, financial services, aquaculture and marine technology.
“The purpose of these benefits is to give us a leg up in competition with businesses that are not located in the state,” he said. “If we have the lion’s share of information technology and life science and precision manufacturing companies in this region, then we need to encourage that.”
The move, however, may also be viewed as an effort to advance the argument made by South Portland and other service center communities, who believe they are footing the bill for other, more rural areas of the state.
Carson said South Portland, Westbrook, Scarborough and Portland account for 40 percent of the state’s overall employment and gross state product. The communities hope to frame the issue in the context that whatever is good for Cumberland County will be good for the state in general, including rural Maine.
Rather than asking the state to return more money to South Portland by increasing education assistance or revenue sharing, Carson said tax incentives to lure businesses to South Portland would not only help the city, but also the state.
Those numbers, however, could be the effort’s undoing, since Pine Tree Zones were created to assist areas with high unemployment and low wages. But Carson said South Portland may be able to lure businesses that may not necessarily locate to rural Maine.
“Businesses thrive in clusters,” Carson said. “Businesses like to be next to their competitors.”
Carson said the bill is being ushered by area legislators, but has yet to be presented.