Economic Development Programs Are Not Performing

It takes more than spending money on economic development to bring jobs to Maine.  A review of what the state spends on economic development programs showed that Maine taxpayers were paying more than $200,000,000 per year and receiving little benefit.  According to the report from the Office of Program Evaluation & Government Accountability, many of the programs have no stated purpose, lack specific goals, are not regularly audited, and have no performance measurements. 

Tax incentive programs, specifically, appear to be some of the worst offenders.  Ninety percent of those programs were at high risk of not performing, and lacked accountability and transparency.  This suggests that luring companies to Maine with lucrative tax breaks is not the panacea some would make it out to be.  Our state government and non-profits have been trying that for years and been unsuccessful.  Worse, even if a program was designed properly, there’s no evidence to show the money was managed properly. 

The recent news that our state government will have to cut at least $400 million from the budget should emphasize the need for proper management.  If we were collecting the right information and continually evaluating the performance of state programs, then it would be easier to identify the programs that needed to be reformed or eliminated to save money.  Instead, department heads are going through their budgets making wholesale cuts to try and make the numbers work.  No successful company would manage their business that way, but evidently that’s the path the politicians in Augusta have chosen. 

Creating jobs is going to take more than tax incentives or dumping more money into so-called economic development programs.  It won’t come from investing in one industry or another with money we don’t have.  And until our state government relearns the fundamentals of properly managing a budget, even worthwhile investments in infrastructure and education may not prove effective. 

We must get back to basics.  Maine needs strong leadership at the top from someone with the right background and financial experience to address the specific economic problems we face.  The days of managing by hope and handing out checks are over.

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