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BATH — A state tax break for Bath Iron Works could go to votes in the House of Representatives and Senate by the end of this month, according to the bill’s sponsor.
In the meantime, Bath resident Bruce Gagnon, an outspoken opponent of LD 1781, Tuesday said he would end his hunger-strike protest of the bill after 37 days. He had planned to continue the strike until the bill is finally voted up or down, but concluded it for medical reasons.
The bill, which would renew a tax incentive first passed in 1997, would provide the shipyard an income tax incentive in return for making investments in its facilities and preserving jobs.
As originally proposed, BIW would receive an annual refundable corporate income tax credit, for up to 20 years, that equals 3 percent of its $100 million qualified investment. The credit would have been capped at $60 million, or 3 percent of $100 million, over the course of 20 years.
To qualify, BIW had to invest at least $100 million in its facility, and preserve at least 5,000 jobs. The shipyard reports having about 5,700 employees.
The Legislature’s Joint Committee on Taxation voted 11-2 that the bill “ought to pass,” albeit with the tax break capped at $45 million, or $15 million less than initially proposed.
In the incentive’s first phase (years 1-10), BIW would make a $100 million investment, receiving as much as $3 million a year in return, up to $30 million. In the second phase (years 11-15), the shipyard would make a second $100 million investment, receiving up to $3 million back a year, capped at $15 million.
The tax break would total $45 million over 15 years for a $200 million investment, according to bill sponsor Rep. Jennifer DeChant, D-Bath. Because she is the sponsor, the bill will first be voted on in the House, then the Senate.
“The process of LD1781 has been a textbook case of developing public policy,” DeChant said March 15, noting that it is common for a bill to be amended.
“At the first work session, I provided amendments that helped set the table for the committee’s consideration,” she added. “Then the Tax Committee did a deep dive into evaluation, consistency and development of tax policy with bipartisan support. I am pleased with the process.”
Investments in the shipyard made through the bill would include construction, modernization, improvement, or expansion, according to DeChant.
“BIW must compete for work against a shipyard which is well equipped and aggressively seeks to win work that might otherwise come to Bath,” Lisa Read, a shipyard spokeswoman, said in January in reference to Ingalls Shipbuilding. “The tax credit will benefit the shipyard by lowering the cost of doing business in Maine and helping BIW’s competitive position relative to its competitor in Mississippi.”
Gagnon, coordinator of the Global Network Against Weapons & Nuclear Power in Space, said after a press conference in Augusta on March 15 that he has been pleased to see the opposition to what he calls “corporate welfare.”
While $45 million is “chump change” for GD, “to the state of Maine it’s a lot of money when we have so many needs,” such as transportation infrastructure improvements, he said.
The 25 percent tax break reduction is “a positive sign in that (legislators) felt the pressure from the public to do something,” Gagnon explained, noting there have been more than 100 letters to the editor and opinion columns in 25 Maine newspapers, “which indicates to me a widespread support to oppose this bill across the state.”
On the 32nd day of his anti-LD 1781 hunger strike on March 15, he said, “I’m doing pretty well. I’m getting weaker, obviously.”
Shunning solid foods for juices and broth, Gagnon said he had lost 16 pounds, dropping from 175 to 159.
“My high school weight was 155,” he noted, adding with a chuckle, “I’ve got a running joke: what 65-year-old man wouldn’t want to have his high school weight again?”
Asked the first thing he wants to eat after the Legislature votes, Gagnon replied, “I’ve thought of that many times,” noting he actually enjoys watching the Food Channel during this and prior fasts he’s done.
Having spent 30 years in Florida, Gagnon said, he’s feasting his eyes on some grits. A small amount, topped with two poached eggs, with a piece of toast.
“I can’t wait,” he said.
But after a bad night Monday, and continued ill feelings Tuesday, he consulted with medical advisers and opted to end the strike by eating one quarter of a boiled potato, and one soft boiled egg.
Gagnon and others will continue standing in a third floor State House hallway every Tuesday and Thursday while the bill remains in session.
Bruce Gagnon of Bath, shown testifying in Augusta against LD 1781 on Jan. 30, spent more than a month on a hunger strike against the bill, which would provide Bath Iron Works with a new tax break.