Gov. Paul LePage is a proponent of zero-based budgeting, a process by which all expenses must be justified each time a state budget is created.

His idea is great, but Maine also needs a zero-based system to examine tax breaks to ensure they are fulfilling their intended purpose.

If you think this is a small matter, think again.

A legislative study in 2010 found the state loses more on special credits, exemptions and tax breaks than it spends on all state government functions.

Mal Leary of the Capitol News Service reported in 2010 that tax expenditures (another name for tax breaks) cost $6.6 billion over the two-year budget period, which was about $1 billion more than estimated government spending.

“Maine currently has 141 personal and corporate income and property tax reimbursement programs,” then Finance Commissioner Ellen Schneiter told Leary, “and about 133 sales tax and excise tax exceptions or preferences.”

In fact, if Maine is a leader in anything, it is sales tax exemptions:

“In a 2008 survey, the Federation of Tax Administrators identified 168 items that are subject to the sales tax. Maine taxed only 25 of them,” Gordon Weil wrote in a column for the Sun Journal.

Among those items exempted are the retail sales of publications, including newspapers.

“In sharp contrast, Connecticut taxed 79, and Hawaii taxed 160. Even New Hampshire, which is thought to have no sales tax, actually taxed 11 items.”

Weil was writing for the Maine Center for Public Interest Reporting.

But some of the state’s largest tax breaks go to business interests, such as John Baldacci’s questionable Pine Tree Zones and the well-entrenched BETR tax on business equipment.

Every tax break was originally developed to accomplish some public purpose, whether that was to spare citizens from paying tax on prescription drugs or encouraging business development.

Once established, the breaks often roll along for decades without examination.

The PEW Center on the States recently concluded that half of the states do little to analyze their tax credits, exemptions and deductions.

The study found that “no state regularly and rigorously tests whether those investments are working …”

Maine was one of the states “not meeting any of the criteria” for evaluating tax-breaks.

The Legislature did initiate the 2010 study, which found 11 programs related to economic development that warranted “further analysis and review.”

But, according to Rep. David Webster, D-Brunswick, co-sponsor of the study committee legislation, when Republicans came to power in 2011 the Taxation Committee “did a 180-degree turn” and abandoned the project.

The PEW Center report should be a wake-up call for legislators.

This is not a partisan issue; it is just bad business not to evaluate these programs for effectiveness.

PEW recommends several criteria for “effective evaluation,” such as setting a schedule to review each tax break and building “sunset” provisions into all tax incentive programs.

The report cites examples of states that have uncovered and corrected ineffective programs.

The Legislature should task The Office of Program Evaluation and Government Accountability with evaluating at least one program a year. The analysis should be ruthlessly objective and free of outside political pressure.

All taxpayers deserve to know whether these “tax expenditures” are still working. 

In this era of tight budgets, we cannot afford anything that never worked or has outlived its usefulness.

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The opinions expressed in this column reflect the views of the ownership and the editorial board.