Unless Maine’s tax climate improves, businesses will continue to leave the state, taking good jobs with them.

A number of statewide organizations – ranging from advocacy groups to think tanks – are studying Maine’s future viability in terms of its economy and quality of life. After careful analysis, many reports seem to draw a similar conclusion: Maine is in trouble.

Despite their various points of view and agendas, many are coming to three basic conclusions: the state lacks adequate investment in research and development; the costs of doing business and living in the state are prohibitively high; and Maine needs more and better opportunities to attract youth.

More than ever, these circumstances call attention to the need to sustain and attract good-paying jobs, which Maine’s ever-important – albeit shrinking – manufacturing sector still provides.

According to the Maine State Planning Office, despite the state’s loss in manufacturing jobs over the years, manufacturing still ranks third in contributing to Gross State Product, behind the government sector and the real estate industry.

Here’s another interesting fact: manufacturers pay better wages than most other industries, about 22 percent higher than the national average. In 2003, full-time workers in the U.S. manufacturing sector received on average just more than $63,000 in wages and benefit compensation, compared to just under $50,000 for the rest of the workforce.

Here’s the rub: Manufacturing in Maine has become extremely expensive. All the issues families deal with – high energy costs, high insurance rates, spiraling health care costs, inflation – haunt businesses, too. It’s not merely that costs are high in Maine. It’s that they are stratospherically higher than they are in most other parts of the country, and certainly than in most other countries.

In an increasingly competitive global market, manufacturers must continue to invest in technology and in its people, or they will die. It’s that simple.

One huge obstacle to manufacturers making these important investments is the personal property tax on business equipment and machinery. In fact, it discourages companies from investing, since the more a company invests in new equipment and machinery, the more it is taxed. About 10 years ago, to help ease the burden, the Maine Legislature enacted the Business Equipment Tax Reimbursement Program. That program allowed manufacturers who pay personal property taxes on business equipment to local municipalities a tax reimbursement from the state.

It worked well, not only for large manufacturers in our area like Tambrands, Elmet Technologies, General Electric, Panolam Industries and Formed Fiber Technologies, but also for smaller companies such as Safe Handling, the Sun Journal, Hancock Lumber, Seltzer & Rydholm, VIP Tires, Parts & Services, White Rock Distilleries and Penmor Lithographers. More than 100 local companies representing over 10,000 good-paying jobs in our local communities now receive a BETR reimbursement. It is a modest but important way to offset the high cost of doing business in Maine. Equally as important, it encourages investment in research and development, new equipment and, ultimately, more high-paying jobs.

Unfortunately, for several years BETR has been under attack as legislators search for an easy way to balance the budget. This is a huge mistake. For one thing, companies that make corporate decisions hundreds of miles away don’t need too many more adverse costs and competitive disadvantages in Maine before they decide to pull the plug. It’s a business decision, plain and simple. In this globally competitive manufacturing environment, it’s all about return on investment. Secondly, and equally important, the small manufacturer could be dealt a death blow if he or she is relying on BETR funds that are taken away or that never arrive.

The time has come to eliminate the personal property tax on business equipment and machinery once and for all. Shortly, bipartisan leadership of the Legislature will introduce legislation to ease into a new structure that will do two things. First, it will phase out the tax on business equipment and machinery to help keep the state and its manufacturers competitive. Secondly, it will phase in the new plan to minimize the impact on local property tax revenue. Lastly, existing BETR reimbursements will remain in place until eligibility ends.

This bill needs broad support. The success of Maine companies affects local people, local jobs and local families. If taxes keep going up and inducements like BETR keep going down, I predict companies will keep moving out. If Maine continues on its current path, jobs will be lost.

Removing the municipal tax on new investment in Maine is about survival of some of our very best employers. It’s about keeping jobs local. It’s about common sense.

Charles Morrison is president of the Androscoggin County Chamber of Commerce.