Article IV, Part Third, Section 14 of the maine State Constitution

Article IV, Part Third, Section 14 of the Maine State Constitution says:

Corporations shall be formed under general laws, and shall not be created by special Acts of the Legislature, except for municipal purposes, and in cases where the objects of the corporation cannot otherwise be attained, and, however formed , they shall forever be subject of the general laws of the state ( emphasis mine)

Quote from the legislative Charter for Brunswick Landing Maine's Center for Innovation : The Midcoast Regional Redevelopment Authority is established as a body corporate and politic and a public instrumentality of the State to carry out the purposes of this article. The authority is entrusted with acquiring and managing the properties within the geographic boundaries of Brunswick Naval Air Station. [2009, c. 641,
§1 (AMD).]
1. Powers. The authority is a public municipal corporation and may:D. Exercise the power of eminent domain; [2005, c. 599, §1 (NEW).]


Saturday, March 13, 2010

Who Benefits and Who Pays for Maine's Big Government Management of Our Economy?

An Open Letter to Senator Trahan,

Dear Senator Trahan,

I wrote to you in the past about The Small Enterprise Growth Fund, an investment corporation created by the Maine State legislature for the purpose of attracting high growth venture capitalists to Maine.

At the time I suggested that “the Fund” should “roll over” to invest in the micro-economy, which you thought was a good idea. I am now writing to say that I think it is a terrible idea. It is redundant and wasteful, as it requires an expensive government bureaucracy to select which small businesses in the micro economy will be the beneficiaries. Given Maine’s deficit, it would make more sense to eliminate the taxpayer investment in the Small Enterprise Growth Fund, allowing the micro economy to retain more of their self-generated profits, which is the primary source of capitalization within the micro-economy.

You said the Small Enterprise Growth Fund is one government program that is working quite well. I have heard this before. I read such statements in the Small Enterprise Growth Fund’s email updates, but those statements leave me wanting for more information. Information about The Small Enterprise Growth Fund is difficult to uncover because the legislation that created it states that the SEGF will report to the legislature, bypassing the general public.

I am on the mailing list for the Small Enterprise Growth Fund and The Office of Innovation, The email newsletters read like advertisements and political slogans. I use them as a starting point to uncover the real facts. However I have yet to find the annual report of the Small Enterprise Growth Fund. It may be publicly available, but if so, it is certainly not well publicized- and so fundamental facts such as the identity of the private investors with whom the Maine state taxpayer is in partnership, through the SEGF, remains a mystery. Since the taxpayer portion of the profits always “rolls over to re-invest in the fund, while the private investor demands an “exit strategy” (selling the business), I submit that the tax payer contribution to the Small Enterprise Growth Fund is functioning as a bribe to attract the “high growth” private investor. A “roll over investment” has no “exit strategy”. It just keeps rolling over to reinvest in” the Fund”. The private investor requires an “exit strategy” in order to realize a profit.

Why would the legislation call this partnership “the Fund”? The answer may lie in the Maine State Constitution, Article IV, which describes legislative powers. Section 14 of Article! V states:

“ Section 14. Corporations, formed under general laws. Corporations shall be formed under general laws, and shall not be created by special Acts of the Legislature, except for municipal purposes, and in cases where the objects of the corporation cannot otherwise be attained; and, however formed, they shall forever be subject to the general laws of the State.”

I submit that the formation of The Small Enterprise Growth Fund through an act of legislation, is unconstitutional, - short of the argument that is premised on the belief that the State of Maine cannot attract high growth investors without bribing them. To that end I submit that the recently passed LD1666 is yet another bribe to attract “high growth” capitalization to Maine. This legislation, combined with LD1, provides “tax credits” for investments in Maine businesses that are approved by FAME. Who does it allot these tax credit to? First to government employees who get a credit of 80 % of their investment, and then, a tax credit of 60% of the investment, to private entrepreneurs, who, as stated in the legislation need not be Maine residents paying Maine taxes in order to qualify for a Maine state tax credit. The LD1666 legislation also states that the same 60% tax credit is available to non-profit organizations, which for the purpose of the tax credit will be treated as taxpayers. The reason this needed to be stated is obvious.

The legislation also identifies who is not eligible for this tax credit, and that would be primarily small business owners of the micro-economy who not only invest their “roll over capital funds” created by their self-generated profits, but also their time and energy and soul in their businesses. Also excluded are any persons related to the owner of the business. It is a long standing tradition that one of the primary sources of micro-economy investment are friends and family, and so this legislation, by offering a carrot for investment in businesses favored by our government, thus stacks the deck against the micro-economy, whose resources are already being taxed to fund the sector which our government has pompously designated as “the creative economy”.

LD1666 was submitted by the president of the Senate and Gubernatorial candidate, Libby Mitchell. I am hoping that gubernatorial candidates will emerge that will campaign on reducing the size of our indebted state government by getting the government out of the business of managing our economy and picking and choosing who gets the benefits and who gets taxed to pay for those benefits. I see no guarantee that investments that are lured to Maine through bribes and which demand ‘exit strategies” are actually here for the long term. “High growth” investors have their personal profits in mind when the business is sold, as is the meaning of the “exit strategy”. A high growth investor will sell to the highest bidder. To my knowledge the 10% taxpayer investor has little say about the “exit strategy”, any more then they have easy accsess to the annual report or the identities of the other investors.

I believe that Maine is capable of attracting investors without bribing them and taxing those lower down on the economic scale to pay for it. Can we bring back honor into our system?

I pay attention to the grass roots political movement, which is against big government and to that end, the focus, is on welfare reform. The legislation that created the SEGF is designed to insure that it’s business takes place behind close doors away from the view of the general public. Every one knows about the welfare system but the general public, by design, is left unaware of the goings on in our Maine State governmental business management system.I hope that in the up-coming election season. This will change.

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