Portland Mayor Ethan Strimling is renewing efforts to require companies that receive city tax breaks to diversify their construction crews and pay a livable wage, among other things.
The proposal would only apply to projects that receive Tax Increment Financing from the city, but not all city-funded projects, such as school renovations.
“If we’re going to give tax breaks like this, we want to make sure there’s a broad community benefit,” Strimling said. “This is the starting point for the conversation. My goal is to use taxpayer money well.”
Strimling originally tried to attach similar requirements to a Tax Increment Financing deal for the biotech firm Immucell last year, but withdrew the proposal after councilors accused him of trying to upend the agreement.
Instead of debating and likely defeating the proposal, councilors agreed to take up the idea as part of a broader discussion about the city’s TIF policy, prompting Strimling to withdraw his initial plan.
The council’s Economic Development Committee will begin that discussion Tuesday.
“It may take a couple meetings to work through it,” Chairman David Brenerman said, noting that the committee will look elsewhere to see if similar policies exist in other cities and, if so, how well they work. “I think we need to do some research on the impact on Portland if we do this.”
Three city councilors – Justin Costa, Pious Ali and Brian Batson – expressed their support for the proposal in a statement Friday.
Strimling’s proposal would apply to individual projects receiving Tax Increment Financing by the city. Such agreements allow a business to retain a certain amount of new property taxes generated by a development to offset the company’s construction costs.
In recent years, the council has amended its TIF policy to move away from individual agreements in favor of district-based TIFs, which devote a certain percentage of new property taxes from development into a specific fund for public infrastructure improvements, such as utilities, roads, sidewalks and public transit.
Strimling’s proposal would require at least 25 percent of all working hours on construction projects funded by TIFs to be performed by Portland residents, minorities, women or veterans.
However, the proposal allows developers to receive a waiver from this provision if they can prove a financial hardship. Such a waiver would need to be approved by the City Council.
“These are underserved populations in Portland and this will be an invaluable tool in helping alleviate the poverty that has held these populations back for decades and will be critical in helping create an all-inclusive economic mobility,” Ali said in a written statement.
The proposal also requires crews to be paid the wages and fringe benefits established in either the state prevailing wage law, or the city’s minimum wage law, whichever is greater.
Prevailing wages are set on an annual basis by the state Department of Labor on a county-by-county basis for state construction projects exceeding $50,000.
In 2017, prevailing wages, including fringe benefits, were around $20 an hour, ranging from $13.63 an hour for a fence-setter to $91.28 for an elevator installer, according to the DOL.
The city’s minimum wage, which is indexed with inflation, is currently $10.68 an hour.
Finally, the proposal would require construction firms to participate in apprenticeship and job training programs that are certified by the state or federal governments.
Developers who exceed the proposed requirements would be able to receive up to an additional 2.5 percent of their total TIF subsidy. But if they fall short, the city could terminate their agreement, through a so-called “claw-back” provision.
Firms would have to submit a report to the city proving they complied with the ordinance. If they are unable to do so, the city could rescind the tax break and recoup any financial benefit already awarded.
“The claw-back provision is an important part of this,” Strimling said. “Oftentimes, we give tax breaks but there’s not strong enough language around what we’re trying to accomplish. This makes sure if people are not meeting the expectation, we can get the money back.”
The proposal is being supported by the Maine Building Trades Council.
“We need fresh thinking about how to use TIFs to supply the trained, skilled construction workers we need, while giving Maine’s working families income security and a step up to the middle class,” John Napolitano, the council’s president, said in a written statement. “At the same time, hiring and training local will inject new revenue and confidence into Portland’s economy”
He added: “Partnerships like these can work to build the future we want in Portland and throughout Maine.”
The proposal differs from the one the mayor pushed for last year.
His previous proposal required 25 percent of working hours be performed by Portland residents and an additional 25 percent of working hours performed by minorities, female, disabled, LGBT, economically disadvantaged, active military or veteran workers. Strimling’s previous proposal included neither the claw-back provision, nor the bonus award.
Randy Billings can be reached at 791-6346 or at:
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