Maine is a state of contrasts – it discloses very little on which companies benefit from subsidy deals but it has a rigorous system to evaluate its programs. Large retailers in the state had been using “dark store theory,” a dubious practice that let them have their stores appraised as if they were empty, meaning much lower property tax payments.That changed in 2022,when legislation introduced by State. Rep. Ann Matlack to ensure the big box retailers in Maine were assessed the same as other open facilities became law.

The state has also subsidized its major employer, Bath Iron Works, owned by General Dynamics, with decades-long specially crafted deals for the company. 

The Maine Department of Economic and Community Development (DECD) manages various subsidies, along with the Maine Revenue Services (MRS), which processes tax-based subsidies. Maine is one of a few states where state programs directly abate local property taxes. Local officials process company applications but have little say in the process.  

Maine’s recipient-level transparency laws were once were the national standard, but were inexplicably repealed back in 2008 and never reinstated. The expired but still active Business Equipment Tax Reimbursement (BETR) program is the only transparent program in the state, but it discloses only company names and subsidy amounts. A program that succeeded BETR has no company level transparency. 

The state reports lost revenue under GASB 77 for three programs, including the Employment TIF, the Pine Tree Development Zones, and the New Markets Capital Investment Tax Credit; some localities report aggregate revenue losses to Tax Increment Financing. The costs of tax-based subsidies are also included in the state Tax Expenditure Reports. 

The state has a rigorous system to evaluate major subsidies on a six-year cycle. The Office of Program Evaluation and Government Accountability publishes detailed evaluations that include economic impact analyses and suggestions for how to reform the programs. For example, an evaluation of a property tax abatement program forced the state to pay localities for administration of the program.