These days, it seems like bad news travels fast; home construction recently hit a 17-year low, applications for unemployment benefits exceeded recession levels and home foreclosures nationwide are 71 percent higher than they were in October 2007. Yet this past week, I was proud to announce some good news for Maine that I expect to work quickly to boost economic development and unlock our stagnant credit markets.
|Senator Olympia Snowe represents the State of Maine in the United States Senate.|
Last week, Coastal Enterprises Inc. of Wiscasset was awarded $112 million in tax credits from the U.S. Treasury to foster development and economic growth throughout low-income and rural areas of Maine. The tax credits were issued under the New Market Tax Credit program. The program, which was enacted in December 2000, offers a seven-year, 39 percent Federal tax credit made through investment vehicles known as Community Development Entities (CDEs). These CDEs -- like Coastal Enterprises – combine their own private investment dollars with the capital generated by these tax incentives to make loans to or investments in businesses in low-income communities.
Coastal Enterprises provides financial and technical assistance to small and medium sized businesses located in primarily rural regions of northern New England. The company will direct its loans and investments to non-real estate businesses (both for-profit and non-profit entities), providing flexible debt for rural, natural resource-based businesses. It will focus on both small and medium-sized enterprises, community facilities, and commercial real estate projects needing less than $2 million in capital, as well as high community-impact businesses with capital needs between $2 million and $20 million.
In 2003 the tax credit allowed Coastal Enterprises to secure private investment to provide $4.1 million for financing the Gulf of Maine Institute in Portland creating over 50 jobs and supporting Maine’s fishing industry. In the County, the NMTC program allowed Coastal Enterprises to make a $7 million investment in Maine Mutual Group and, with these funds, this progressive company expanded its business, doubled the size of its facilities in Presque Isle, and allowed the company to hire an additional 45 professional employees. As a long-time champion of New Markets Tax Credit (NMTC) Program, I am thrilled that Coastal Enterprises, which has participated in the development of this $22.5 billion program, has received such a significant award. These tax credits will allow Coastal Enterprises to make critical and substantive investments in small businesses throughout our state which in turn will allow these businesses to weather these trying economic times.
As the NMTC program encourages economic growth in disadvantaged areas by providing tax incentives for private investment in local businesses, I have consistently sought Congressional support for the program including authoring legislation that would reauthorize the credits for five years. I was recently successful in securing a one year extension of the program through 2009 that was enacted in to law as part of Emergency Economic Stabilization Act of 2008.
For certain, the fact that Coastal Enterprises was given the largest award out of 239 applications is a testament to the organization’s leadership and competence to work within this critical program to bring investment to disadvantaged communities.
The NMTC program has helped to bring critical investment dollars to help spur job creation and opportunity in some of our most disadvantaged communities. Investing in our nation’s small businesses in these areas is a direct and responsible step we can take to reverse the current economic downturn that is creating numerous hardships for employers and workers throughout the country. Clearly, that's a goal that we can all agree is critical for Maine and the nation during these difficult economic times.
Senator Olympia Snowe (R-Maine) is a member of the Senate Finance Committee and the Ranking Member of the Committee on Small Business and Entrepreneurship.