Proposed Dirigo business subsidy is a bad deal for Maine and could worsen inequality

The Mills administration is rushing through a $55 million per year tax giveaway for businesses without proper vetting that could worsen inequality in Maine. As recently noted by Maine Center for Economic Policy, there are many unanswered questions about this expensive business subsidy. Appropriations and Financial Affairs committee members pushed back on the costly program last week, which has limited guardrails in place to ensure equity and accountability, including:

  • No sunset date
    • Sunset dates proactively set a future date for the legislature to consider whether it is worthwhile to continue the program, rather than continuing it indefinitely without any proof of effectiveness.
  • Bigger subsidies for big businesses and corporations
    • The program allows tax subsidies up to $2 million and tax refunds of up to $500,000 per year. Big giveaways mean bigger checks for corporations and big businesses, meaning they are less likely to benefit small businesses and their local communities.
  • Benefits concentrated in high-wage, male-dominated industries
    • Employees in the industries targeted by this program are 75 percent male. Meanwhile, employees in the areas of health care, direct care, child care, and education — fields that also support other Mainers to participate in the workforce — are predominantly female, underpaid, and facing challenging work environments that are resulting in dire workforce shortages.

Programs like this worsen wealth, gender, and racial inequality by further concentrating wealth in the hands of those who already hold the most. The $55 million cost of this program will draw money from Maine workers, communities, and small businesses, and funnel it toward big businesses who already have the wealth and resources to make the investments this program hopes to attract. There is no evidence that the investments used to claim this credit wouldn’t be happening anyway, or that this expensive experiment will pay off for Maine.

Instead, Maine could invest this money in evidence-based programs with proven outcomes, like the child tax credit and paid family and medical leave and help expand access to child care and affordable housing. These proven solutions1 would help more Mainers participate in the workforce and help address our workforce shortage. Public funding should support evidence-based programs that benefit the people of Maine — not expensive tax giveaways that perpetuate structural inequality.


[1] Maine Center for Economic Policy, “Brief: Providing workers the support they need to enter and stay in the labor force.” 26 May 2023.