Free ME

 Free ME

The readers of Bangor Daily News know that the economy of Northern Maine is not the same economy as Southern Maine. Unfortunately, the challenges to achieving economic prosperity in Maine are greater in the northern part of the state–often referred to as the Rim Counties (Aroostook, Franklin, Oxford, Penobscot, Piscataquis, Somerset, and Washington).

Compounding the economic woes is also the fact that the Rim counties suffer under a much larger problem of government dependency. As shown in the recent  MHPC study, “Fix the System,” (pdf) nearly 1 out of every 3 Mainers is on welfare (Medicaid, TANF, and Food Stamps). Among the worst counties are Washington at 36 percent, Somerset at 34 percent, and Oxford at 31 percent.

The most effective way to increase economic prosperity and reduce government dependency in Maine is to direct attention to the areas of the state that need it most. Maine’s Pine Tree Development Zone (PTDZ) program, enacted by Governor John E. Baldacci (D), attempted to do just that. The PTDZ program is based on the idea behind Enterprise Zones pioneered by Jack Kemp in the 1980s of which there are now more than 3,000 such zones around the country.

Unfortunately, as shown by the continued deterioration of Maine’s economic performance, PTDZs do not pack enough economic punch to put Maine back on the path to prosperity since these zones are so limited in scope. More needs to be done.

Today, The Maine Heritage Policy Center is launching the Free ME initiative, which takes the economic logic behind PTDZs to its ultimate conclusion–if some tax relief is good, then total tax relief is best!

Free ME seeks to spur business and job growth by fully eliminating the personal and corporate income tax and the sales tax for businesses and individuals in a select county(ies) of the state. After examining four key economic variables, Washington County is clearly the area of Maine experiencing the greatest degree of economic distress and government dependency–it is the only county where 1 in 5 residents lives below the poverty line.

At the same time, Washington County has an abundance of natural resources such as the port of Eastport (the deepest natural harbor in the continental U.S.), the longest undeveloped stretch of coastline on the east coast, and thriving forest, fishing, and blueberry industries.

Over time, the Free ME initiative will spark new businesses and jobs, thereby improving Washington County’s relative economic standing in the state. Eventually, Aroostook County (now the second most economically distressed county in the state) will likely top Washington County and the Free ME initiative would be triggered there as well, and so on down the list.

Overall, Free ME is not a new concept. Free ME simply expands on the bipartisan idea embodied in the PTDZ, which will exponentially increase the positive economic impact on the economically hardest hit areas of Maine. The Free ME initiative will help put Maine back on the path to prosperity.

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