Maine Democrats Want $100 Million Tax On Poland Spring, Critics Warn It Will Hurt Economy

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Posted: Apr 06, 2019 11:35 AM
Maine Democrats Want $100 Million Tax On Poland Spring, Critics Warn It Will Hurt Economy

Source: Provided by Bangor Daily News/Screenshot

Democratic state representatives in Maine want to cash in on one of the state's consistently successful business -- Poland Spring -- by establishing a water tax that would be only for the popular brand, and raise more than $100 million in taxes for the state. But, many point out the unfairness -- crafting a tax specifically for one company -- and warn this idea will deter futures businesses from opening in the Pine Tree State.

The tax would require the company to pay 12 cents to the state per every gallon that the company uses from Maine's natural resources, nearly 960 million gallons of water a year.

“We need the revenue,” the bill’s sponsor, Rep. Lori Gramlich, D-Old Orchard Beach, told the Portland Press Herald. 

But the company says the bill will actually hurt Mainers who work for the Swiss-owned water bottling business because they will be forced to cut back operations. The company employees nearly 900 Mainers and provides water throughout the country. It gets its water from three sources in Maine.

“I don’t buy it,” Gramlich said of the company's warning. But Poland Spring employees like distributor John Bedard are concerned that he will indeed suffer and earn less income because of the idea. He also is concerned that other Mainers will lose out on jobs in the future because companies will avoid potentially being taxed

“Why punish any company that does well here in Maine?” he asked lawmakers according to the Portland Press Herald. “Adding a tax can cause Poland Spring to rethink their presence in Maine at all.”

This statement was echoed by the commissioner of the state Department of Economic and Community Development, Heather Johnson. She said her department “believes that creating specific, significant taxes on existing industry will make Maine a state where the private sector is concerned to invest.

However, Gramlich insists this only unique to Poland Spring because they take so much water from Maine.But even this does not make any sense, according to the state geologist Robert Marvinney. He says the water is so rapidly replaced it is as if they are not taking any resource at all. 

Furthermore, he adds "Poland Spring is not even the biggest user, he said. One blueberry grower in eastern Maine, Marvinney said, uses more than a billion gallons for irrigation each summer." 

Attorneys for Poland Spring argue that the tax is “violates several of the most fundamental principles of sound tax policy,” including “that any new tax should be fair and equitable.”

“By way of example,” Jonathan Block told the state legislature, “if we consider another renewable natural resource, such as wood and applied a similar concept, we would be proposing to tax wood if it is used for, let’s say toothpicks, but not tax it if it is used for any other use, such as paper, furniture and lumber. "

Other companies warn that the tax would harm Maine's economy as well. 

"Peter Vigue, chairman of The Cianbro Companies, said adopting the tax would “send a chilling message to potential investors around the globe that Maine is not a welcoming environment.”

“At a time when our state is thirsting for economic growth and stability, and turning the corner to position itself to achieve that goal, it is our opinion, as a state, we should be looking for ways to foster that momentum, rather than putting up additional roadblocks,” Vigue said.

The tax has yet to be implemented but if it does, Poland Spring's attorney says "This tax will take a productive and successful Maine business and possibly tax it out of existence, threatening almost a thousand good jobs, not to mention the loss of revenues and jobs among Poland Spring’s Maine vendors and suppliers."