A new state law offering tax breaks to new and expanding industries has paved the way for Pratt & Whitney Aircraft to locate a plant in this small, southern Maine village.
The factory, which will produce parts for jet airplanes, is expected to employ as many as 2,300 workers by the mid-1980s. Such a work force would equal the population of North Berwick.
The special tax legislation approved by the Maine House and Senate today offers tax incentives to new or expanding manufacturers that invest $5 million in new equipment and buildings and create 200 or more new jobs.
"The law is clearly to attract industry." state Sen. Phillip Jackson said. "We're putting it all up front, out in the open. We want this kind of clean, high-quality industry in Maine."
Jackson, chairman of the legislature's taxation committee, said the new statutes may bring back some of the indsutry New England has lost "to sunnier states." He added, "We looked at what other states, especially in the South, were offering businesses. We decided it was time to get moving ourselves."
He said New Hampshire is the only other New England state offering special incentives to new Businesses.
"They offer tax exemption on capital equipment and on expansion," Jackson said. "They offer everything." New Hampshire is the only state without a general sales tax or a personal income tax.
Pratt & Whitney has been negotiating the move north with Maine officials and the owners of the building it will occupy since September. The 824,000 square foot building is the largest in Maine and now houses Converse and Malden mills shoemakers and a warehouse for Value House stores.
No company spokesman would comment on the new factory. Pratt & Whitney officials have said the Maine facility will do work now handled by its North Haven, Conn., plant. They have said no Connecticut jobs will be lost because of the move.
Jackson said Pratt & Whittney "is prepared to buy the building when the law is enacted." He added that the tax incentive bill "was not proposed by the company but by the state development office."
State Development Director Hadley Atlass has said, "spin-off industries" expected to develop around Pratt & Whitney will do $8 million - $10 million in business annually. He said the company will hire 600 employes initially, and reach 1,000 workers by 1980. "In addition, 1,200 to 1,300 more employes are possible in the early 1980s," Atlass said.
With 2,300 workers, Pratt & Whitney would be the largest private employer in southern Maine. The Portsmouth Naval Shipyard, 13 miles from North Berwick, employs 7,500. Maine officials estimate half the people who will work at the new factory will live in nearby New Hampshire and Massachusetts.
Before Maine lawmakers approved the special tax laws, Gov. James B. Longley told them the bill provides "an opportunity to attract a major, quality firm to Maine." He said the measure also, "lays the groundwork for the expansion of our existing firms and for the attraction of other new business."
Longley, an independent, will leave office Dec. 31. He has spent most of his last weeks as governor trying to convince industry to locate in the northeast.
He said many young Maine workers cannot find jobs in New England. Pratt & Whitney is expected to pay production line workers up to $15,000 per year, about twice the average Maine Worker's salary.
"Many believe we are on the threshold of a major milestone in our efforts to attract higher quality jobs to Maine," Longley added.
The Maine tax plan is patterned after a federal law that provinces investment tax credits, which are applied to corporate income taxes. It gives firms investing $5 million and hiring 200 new workers a tax credit of $300,000 per year for up to seven years.
State Sen. Jackson added, "Maine has been hurt by the high cost of transportation and energy." He said firms are reluctant to relocate in the cold northeast "because, like anyone, they don't want to pay heat bills." Tucked away from the rest at the nation, Maine has freight rates that prohibited some companies from locating in the state and led others away, Jackson said.
"However, Maine labor has always been attractive," he said. "Maine workers demonstrate high productivity. A day's work for a day's pay."