Opinion ID: 2259172
Heading Depth: 1
Heading Rank: 1

Heading: the public-purpose doctrine

Text: [¶ 10] Article IV, part 3, section 1 of the Maine Constitution specifies that the Legislature shall have full power to make and establish all reasonable laws and regulations for the defense and benefit of the people of this State, not repugnant to this Constitution, nor to that of the United States. We have interpreted this section to require that taxation and spending at either the state or local level be for a public purpose to be constitutionally valid. Common Cause v. State, 455 A.2d 1, 15 (Me.1983); Crommett v. City of Portland, 150 Me. 217, 230, 107 A.2d 841, 849 (1954). [¶ 11] Although the courts determine whether a legislative action satisfies the public purpose doctrine, a legislative finding of public purpose is given great weight. Common Cause, 455 A.2d at 16; Crommett, 150 Me. at 231, 107 A.2d at 849. As we stated in Common Cause: It is not for the Court to assess the wisdom or the efficacy [of the expenditures] as a matter of economic or fiscal policy ... If the project has a rational basis, we may not strike it down merely because, if we were acting in the role of voters or legislators, we would deem it unwise. (citations omitted). Common Cause, 455 A.2d at 17; see also id. at 25 (stating a court should invalidate expenditures only when the Legislature's decision has no rational basis). A court must uphold expenditures unless a plaintiff clearly demonstrates that they are not constitutional. Common Cause, 455 A.2d at 17, 25. [¶ 12] The State and the City of Bath approved this project to prevent the loss of economic benefits provided by BIW, minimize employment loss, promote economic development, and stabilize the local tax base. We have recognized that employment is one of the government's principal concerns, and that indirect economic benefits, such as job creation and retention, may qualify as valid public purposes. Opinion of the Justices, 601 A.2d 610, 619 (Me.1991) (indicating that direct payment of excise tax revenues to dairy producers had public purpose because it maintained employment levels that were essential to the dairy industry's survival); Common Cause, 455 A.2d at 24 (holding that increase of flow of commerce, enhancement of employment opportunities, and improvement of State's economy qualified as public purposes). [¶ 13] Contrary to the plaintiffs' contention, the public purpose is not determined by the existence or lack of voter approval for a project, Common Cause, 455 A.2d at 16; public ownership of the facilities that are the subject of the project, id. at 19-21; or by the economic need of the recipient of the aid, id. at 19 n. 23. [¶ 14] Further, while the plaintiffs' arguments may raise policy doubts about the effectiveness of the tax incentive package, they do not clearly demonstrate that the package is unreasonable, as a matter of law, as a means for achieving its stated purpose. There was extensive debate, both in the State Legislature and in the Bath City Council, concerning the benefits and costs of the project before the decisions were made to assist BIW through tax incentives. The information that the State and the City of Bath considered includes information that: BIW is Maine's largest private employer and one of the major shipbuilders in the world; BIW's survival without modernization is uncertain; as many as 7,000 jobs and millions of dollars of State and municipal taxes would be lost if BIW does not modernize; the payroll for BIW operations for the next 20 years will be over $4 billion and generate $245-290 million in net Maine taxes; and the payroll from the new construction will be approximately $50 million and provide additional State tax revenues of $9 million. See, e.g., Sen. Jour. 1395-1414 (118th Legis., 1st Spec.Sess.1997); House Jour. 23-49 (117th Legis.1997); Report of the Task Force on Tax Increment Financing (Jan. 31, 1996); Bath City Council Minutes of September 3, 1997. [¶ 15] In addition, the Shipbuilding Facility Credit Act requires BIW to invest $200 million in the project over the next ten years and maintain an employment level of at least 3,500. 36 M.R.S.A. § 6851 (1997). The business and equipment tax reimbursement requires BIW to purchase the equipment and pay taxes. 36 M.R.S.A. §§ 6651-6659 (1989). [¶ 16] The State and the City of Bath concluded that without assistance, BIW would close its facility, which would result in a substantial loss of jobs. They also concluded that with assistance, BIW would keep its facility operating, many jobs would be protected, the project construction would create additional employment opportunities, and the State and City would continue to receive the economic benefits brought by BIW. After considering all the facts of the record in this case, plaintiffs have not demonstrated, as a matter of law, that the legislative choice was irrational.