1976- The Year Maine State Corporatism Reclaimed Its Might
All it took was overthrowing two essential principles of the Maine Constitution!
In 1969 the Home Rule Amendment was added to the Maine Constitution. It designates authority to the inhabitants of the municipality.to amend municipal charters and to approve public referendums for economic development purposes
Maine Constitution: Municipal Home Rule
Section 1. Power of municipalities to amend their charters. The inhabitants of any municipality shall have the power to alter and amend their charters on all matters, not prohibited by Constitution or general law, which are local and municipal in character. The Legislature shall prescribe the procedure by which the municipality may so act.
Section 2. Construction of buildings for industrial use. For the purposes of fostering, encouraging and assisting the physical location, settlement and resettlement of industrial and manufacturing enterprises within the physical boundaries of any municipality, the registered voters of that municipality may, by majority vote, authorize the issuance of notes or bonds in the name of the municipality for the purpose of purchasing land and interests therein or constructing buildings for industrial use, to be leased or sold by the municipality to any responsible industrial firm or corporation.
1976 Home Rule vs Board Rule
In 1976 Governor Longley invited the heads of Maine’s largest Industries to create a report on developing legislation for statewide economic development management. The Report- Governor’s Task Force for Economic Redevelopment, Recommended Legislation for an Economic Development Program -110th Congress, calls for the elimination of local referendums on municipal bond issues:
2: eliminate the requirement for a local referendum on municipal bond issues Governor’s Task Force for Economic Redevelopment-1976
The reasoning used to justify the goal displays blatant arrogance and disrespect for governance by the Maine Constitution and the inhabitants of the State. The report refers to the constitutional provision as “existing legal requirements”, as if the founding principles of the Constitution are on the same level as statutory law. The report is written as advice to a governing elite advocating the cost and time-saving benefits of eliminating the role of the people in the decision-making process.
Recommendation: Eliminate unnecessary legal restrictions on municipal industrial development efforts.
Rationale:
The municipality provides essential services for a new industry. It is often intimately involved in the process of attracting a particular firm. Existing legal requirements limit unnecessarily the municipality’s ability to attract new firms by extending the time period and increasing the costs to that firm before a definite commitment can be made. The following changes are not inconsistent with practices in other states and would improve the competitive position of Maine communities. (emphasis by author)
Description:
1. The requirement for a local referendum on a municipal revenue bond issue should be eliminated. This is not a requirement in many other states, and it serves as a deterrent to potential new industry. Approval by elected municipal officials should be a sufficient requirement because the municipality must hold the title and issue the bonds in every case. The credit of the municipality is not involved, as has been demonstrated by Maine case law. (emphasis by author)
2. A municipality should be defined by statute as legally equivalent to a local development corporation for the purposes of allowing the MGA to guarantee municipal revenue bonds. Current law requires a local development corporation to hold title in order for an industrial loan to be eligible for a guarantee. This is incompatible with the requirement that the municipality hold the title to be able to issue an industrial revenue bond. This change would eliminate the need for a municipality to take an extra legal step in the process of obtaining new industry. (emphasis by author)
Section 2 of the Home Rule Amendment was originally added to the Constitution in 1962 as section 8A of Article IX of the Maine Constitution dealing with equal distribution of taxation. Section 2 requires an approval vote by registered voters of a municipality to establish municipal authority to issue bonds for economic development within the geographical area of the municipality, the cost of issuing the bond is apportioned among the municipal taxpayers.
Maine Constitution: Article IX Section 8 Taxation
All taxes upon real and personal estate, assessed by the authority of this State, shall be apportioned, and assessed equally according to the just value thereof.
Article IX Section 8: Taxation, was relocated to Section 2 of the Home Rule section of the Constitution in the 1973 codification:
This provision was added to the Constitution as section 8A of Article IX in 1962 (Amend.LXXXVII) and was relocated under the 1973 codification. Its original placement highlighted the intent to restrict the scope of Article IX, section 8, which mandates that all taxes be apportioned and assessed equally. If general obligation bonds were used so that a particular industry got back tax revenue in the form of aid, this could be equivalent to an unequal tax rate and hence in derogation of section 8. The Maine Constitution: A Reference manual by Marshall J Tinkle (emphasis by author)
According to Marshall J Tinkle, previous to 1962’s Maine Municipal Industrial Buildings Bonds Referendum, legislation calling for bonds to be issued for industrial purposes was declared unconstitutional because it was not for a public use, which I interpret as shared in common by all, versus something that directly benefits the few at the expense of the many.
As noted in the literature, the amendment (Home Rule, Section 2) makes it clear that general obligations may now be used to assist private industry for certain purposes” this section applies only to general obligations of municipalities and not to forms of financing that do not create municipal debt or liability” The Maine Constitution: A Reference manual by Marshall J Tinkle
A New Form of Entitlements
The Governor’s Task Force report recommended that two complimentary corporations be chartered by the Legislature, The Maine Capital Corporation and the Maine Development Corporation. The statute chartering the Maine Capital Corporation included the following rationalization:
The Legislature finds that one of the limiting factors on the beneficial economic development of the State is the limited availability of capital for the long-term needs of Maine businesses and entrepreneurs. In particular, the lack of equity capital to finance new business ventures and the expansion or recapitalization of existing businesses is critical. This lack of equity capital may prevent worthwhile businesses from being established; it may also force businesses to use debt capital where equity capital would be more appropriate. This creates debt service demands which a new or expanding venture may not be able to meet successfully, causing the venture to fail because of the lack of availability of the appropriate kind of capital.
This impediment to the development and expansion of viable Maine businesses affects all the people of Maine adversely and is one factor resulting in existing conditions of unemployment, underemployment, low per capital income and resource underutilization. By restraining economic development, it sustains burdensome pressures on State Government to provide services to those citizens who are unable to provide for themselves.
To help correct this situation, it is appropriate to use the profit motive of private investors to achieve additional economic development in the State. This can be accomplished by establishing an investment corporation to provide equity capital for Maine businesses and by establishing limited tax credits for investors in the corporation to encourage the formation and use of private capital for the critical public purpose of maintaining and strengthening the state’s economy. (emphasis by author) source
One can argue that the Maine Legislature did a runaround of the Maine Constitution when it instituted refundable tax credits, which are seldom identified as “refundable” in public promotions, and are referred to only as “tax credits”, or a credit against taxes owed, which is also an arguable violation of equal taxation, but refundable tax credits take it a step further to say that if no taxes are owed, the holder is due a direct payout from public funds equal to the value of the refundable tax credit. Tax exemptions are located in separate acts, the combined effect is that the public subsidizes the holder of the tax credit and bypasses a public bond or referendum vote.
Getting back to Marshall J Tinkle’s thought, Longley’s board changed the instrument but not the function, and so we get this:
If refundable tax credits are used so that a particular industry got back tax revenue in the form of aid, this could be equivalent to an unequal tax rate and hence in derogation of section 8.
The refundable tax credit does not require a municipal referendum, only approval by officials, but it uses public funds to capitalize ownership under the rubric of job creation and so it should be no mystery why this aberration of the principles of our Constitution has resulted in the ownership class- working class divide, unequal distribution of wealth is designed into the mechanics of the law.
The refundable tax credit was implemented in the Maine Capital Corporation, the second recommendation of Longley’s Board.
The first recommendation by Longley’s Board was an overt intention to violate the Home Rule Amendment of The Maine Constitution.
The second recommendation of Longley’s board, the chartering of the Maine Capital Corporation was an arguable violation of Article IV Part Third, sections 13 & 14 of The Maine Constitution, which prohibits the Legislature from chartering corporations by special act of legislation.
Section 13. Special legislation. The Legislature shall, from time to time, provide, as far as practicable, by general laws, for all matters usually appertaining to special or private legislation.
Section 14. Corporations, formed under general laws. Corporations shall be formed under general laws, and shall not be created by special Acts of the Legislature, except for municipal purposes, and in cases where the objects of the corporation cannot otherwise be attained; and, however formed, they shall forever be subject to the general laws of the State.
The attitude of impunity toward the Maine Constitution has persisted in Maine governance ever since. The 2022 enactment of HP 1489, transfers local authority over density and community character to the state. Enacted simultaneously, the Maine Space Corporation, like the Maine Capital Corporation. is an arguable violation of Article IV Part Third, sections 13 and 14 of the Maine Constitution.
In 1984 the Legislature was required to review consistency between practice and the statutory enabling purpose of the Maine Capital Corporation. The Beldon Hull Daniels firm was hired to produce a report. The report identified Maine as a state that excelled in the growth of businesses with 100 or less employees.
Fully 75 percent of employment and virtually all business establishments are associated with small firms. Businesses employing between ten and ninety-nine employees are collectively the most important employers of the size groupings presented, providing about one-third of total state employment. Businesses employing between 100 and 499, and 500 or more employees are also important employers, each providing about one-quarter of total state ·employment. Microbusinesses dominate the state in terms of numbers of establishments but provide a substantially smaller amount of employment than firms in larger employment size categories, less than one-fifth of total employment
Maine Small Business Development Finance Report by Beldon Hull Daniels, Inc 1984 if blocked by Chrome- google it!
In the end, the Maine Capital Corporation benefited investors and invested in very few businesses. Once the tax credit ran out it was decided that MCC had achieved its purpose and MCC was repealed but lived on in subsequent programs such as the Seed Capital Tax Credit.
The Centralized economy grew to become the centralized government of everything taking control of education and housing, to serve its own vision of the State as a development corporation centrally managing everything treating anything it can’t manage as non-existent, for instance, business in a home, the remote workers movement, the free enterprise economy, especially the grassroots free enterprise economy, that same economy that the centralized economy was supposedly created to serve.
Andersen Design was one of the many small businesses that were growing in 1976.
This is my story:
I composed this for a donation request to a local organization.
This is what I submitted, I hereby blow it into the wind
I am writing to request a contribution to my cause as explained in my profile on the Field.
Mackenzie Andersen is a sponsored artist with The Performance Zone Inc (dba The Field), a not-for-profit, tax-exempt, 501(c)(3) organization serving the performing arts community. Contributions to The Field earmarked for Mackenzie Andersen are tax-deductible to the extent allowed by law. For more information about The Field, or for our national charities registration, contact: The Field, 75 Maiden Lane, Suite 906 New York, NY 10038, phone: 212–691–6969. A copy of our latest financial report may be obtained from The Field or from the Office of Attorney General, Charities Bureau, 120 Broadway, New York, NY 10271.
Mackenzie’s Profile on the Field & Donate Link!
Being fiscally sponsored by a community serving the performing arts is not what is to be expected of a ceramic designer-craftsmen company. Since I had never heard of The Field when they invited me to apply for a social justice grant, I can only assume that they came to know me through my newsletter, The Individual vs the Empire, which has been my primary method of connecting to the world, and venue for expressing my voice, wherein I cover local peninsula politics and have garnered many local followers, among followers from more distant places, now totaling 2264 subscribers.
Andersen Design was established on the Boothbay Peninsula in 1952 and taught STEAM skills on the job, while paying payroll and payroll taxes for almost seven decades. Our company made everything from raw materials and created original glaze and body recipes, functional forms, and wildlife sculptures.,
Since my sister, Elise suddenly passed away on May 4th of this year, I am left as the sole custodian of Andersen Design’s assets, which I call productivity assets, consisting of our product line, website, and brand name, and including between two and three hundred original molds which are currently in storage.
My mission is to preserve and utilize the productivity assets that Andersen Design created to recreate our production as a network of independently owned studios, a mold-making business, a ceramic glaze and body research and making center, a gallery, a marketing studio, and a museum with fiscal sponsorship capacity, which are all functions that Andersen Design performed as a business in a home.
The original molds are core assets that make the other businesses that I propose feasible. For instance, someone could start a mold-making business knowing that our product line meets the needs for such a business-to-business relationship. Someone can run a glaze design and research center knowing that our product line calls for a glaze maker and designer to supply the independent decorating studios giving the intellectual property rights to the glazes and bodies greater protection than if the glazes and bodies are being produced in many independent studios. Our products have been sold in venues that order in large quantities scaled to our size, so practicing Andersen Design production is a good asset for marketers.
Community Project: Worker-in-Residence Intentional Community
An important aspect of my mission is to re-introduce ownership within the working classes. A museum with a fiscal sponsorship function can provide a pathway to ownership as well as function as a central meeting place and educational institution. I am promoting the concept of a working-in-residence intentional community, which is an expansion of artist-in-residence zoning that has proven economic development success, but I propose an intentional community that includes any type of work that takes place in a work-at-home or attached to the home environment, Andersen Design’s long history as a successful business in a home uniquely situates me to lead such a movement.
This type of community is called for by directions in which the future of work is moving. A critical mass of workers wants to work from home as it provides a better work-life balance, and it also lowers carbon emissions caused by daily commutes.
But working at home requires space in the home for working, which is different for every kind of work.
The idea that I would like to achieve is possible only if zoning ordinances will allow it. I feel that if Andersen Design had been allowed to expand, in the eighties, on the property we owned across the street we would still be there today, but the town selectmen prohibited us from doing so, and so, I understand how important zoning ordinances are.
While it is not my role to be a lobbyist, I can help to develop a proposal for an intentional community, which might be instrumental in convincing our leaders that businesses in a home are part of both housing solutions and economic development and should be accommodated in zoning laws.
A proposal for an intentional community to the Foundation for Intentional Communities must be submitted by a team of four adults, and so I am looking for at least three other adults to collaborate on this project.
I feel that Boothbay is missing a community for small grassroots entrepreneurs. If there were such a community, it might be a resource where one could find other adults to collaborate on such a proposal. As it stands, I find it difficult to find anyone who will collaborate on anything, and this is the bane of my existence.
And so, I fantasize about a grassroots enterprise clubhouse with a bulletin board where the users can post whatever they want. It would just require a meeting space and people to space-sit to get it started and see where it goes.
The Reinvention of Andersen Design Project
Andersen Design is a separate project, but it is complementary to the workers-in-residence project,
You can read my vision for Andersen Design in-a-nutshell here.
Background:
Paying higher taxes: Around 2018, Andersen Design lost our productive facility to a reverse mortgage. Afterward, the property, the oldest in the neighborhood, was demolished and replaced with another structure. I saw on the realtor site that the new structure was valued at a much higher price than the historical building that it replaced but the tax estimate was at a far lower rate than what we had been paying. I do not have those records at my fingertips, but they should be available. If memory serves me right, we were paying a rate about three times as much as the current owner.
At the time when I was trying to find a way to retain the property, we became fiscally sponsored as a museum by Fractured Atlas. I originally applied for our core purpose as a free enterprise. My personal contact at Fractured Atlas was convinced that we would be accepted because our company had been teaching the skills of how to make ceramics on the job since 1952, but the board of Fractured Atlas rejected our application as a social enterprise citing only that I had used the word “production” on the application declaring that because I used this singular word that Andersen Design was only in it for the money, ignoring our production process that uses fluid glazes, not the predictable glazes that a company that is only in it for the money would use, and ignoring the originating purpose of Andersen Design which was to create a handmade product affordable to the middle classes, during the fifties when the greatest amount of wealth was distributed amongst the greatest number of people and so mid-century design sought to bring good design with clean lines into the homes of ordinary people. And it was a time when the plethora of non-profit organizations that exist today did not exist.
A Business based on a philosophy
Many people do not know that Andersen Design was established on philosophical ideas relating to alternate cultural movements of its times, including the Arts and Crafts Movement and the Garden City Movement, which were responses to the production factories of the Industrial Revolution. My Dad studied Industrial Design at Pratt Institute and then reinvented industrial manufacturing in a more humanistic way.
After rejecting Andersen Design for its decades-long purpose, the board of Fractured Atlas said we could apply as a school or a museum but as a school, we would be forbidden to teach how to make our line, but we would be allowed to teach others how to make our original glazes and bodies which are a signature of our brand.
Taxation without representation
Andersen Design applied for was accepted to be fiscally sponsored as a museum, a field in which I had no background and so, locally, I approached the JECD for guidance and hopefully support in forming a board. The JECD had just spent 79 thousand dollars of money coming from property taxpayers, including us, to hire remote consultants in New York to create a plan for our peninsula. That plan called for museums.
However, when I presented my concept for a museum, Wendy Wolf neither acknowledged nor engaged with my presentation and instead told me that the JECD could not help individual businesses and to go get help from my own peer group. (I don’t think Ms. Wolf knows that my parent’s peer group includes Russel Wright, whose home was made into a museum, and Eva Zeisel who asked Dad to introduce her in the eighties when the Brooklyn Museum Did a retrospective of her work)
If I had been able to find community support at that time, I might have been able to save the property.
Unfair!
In 2022 the state chartered its own space corporation that will use public educational facilities as its workforce training facilities starting in kindergarten. This seems unfair when small businesses also train in STEAM skills while paying payroll and payroll taxes and subsidizing the state’s targeted industries and often receive no community support. Although the Legislature targets the public school system for wider job training via The Industry Partnerships Act of 2013, It is not advisable to use a public facility when one creates original bodies and glazes, as is true of any company with trade secrets.
And so, it is fair for a community to support alternative cultures that teach skills in other types of environments than public institutions.
Ceramic technology is used in the space industry
Ceramic surfaces and bodies are used in all sorts of technologies, including space technology so it seems counterproductive for this community to reject supporting a historically locally established company that engaged in ceramic research and design of surfaces and bodies.
Ceramics are lighter than most metals and are stable at high temperatures. Due to these and other properties mentioned above, structural ceramics are widely used in thermal protection systems in rocket exhaust cones, insulating tiles in space shuttles, missile nose cones, and engine components. Advanced Ceramic Material
Priority Zones are Intentional Communities
The way I see it, the Priority Zones in HP 1489 are intentional communities and should allow for the inclusion of a wide range of intentional communities, including the workers-in-residence intentional community that addresses the remote workers movement and other self-employed workers-business owners. There is a rising call for the work-life balance that working at home provides. HP 1489 calls for housing to be close to work. What could be closer to work than working in the home? However, the concentrated housing zone being planned by the Boothbay Regional Development Corporation does not accommodate working in the home as the units are described as half the size of what is standardly considered comfortable per household size and that does not allow for working space.
Engaged communities are an attraction for both permanent residents and visitors.
Since Andersen Design is a complex industry, of many parts, it can be an asset as an anchor industry for such a community as it can be broken up into multiple businesses- such as a mold-making business, a ceramic glaze and body research and design business, a marketing business, a gallery, and a museum that is also a fiscal sponsor and various independent slip-casting and decorating studios. It could be a core industry that would attract other industries.
Support is needed!
As the sole custodian of Andersen Design’s history and assets, I am working entirely alone, and since my sister and I shared household expenses, my own financial resources are inadequate to support household expenses and all the roles I must perform. I feel like I have about five jobs to do, all of which are too much for one person to do alone. My current need is pressing and immediate so I hope that will be taken into consideration.
Donate Here
First Fundraising Goal and Why
The greatest challenge that I face right now is working alone and having no support system. The response that I have received to date to my search for board members for the museum came with the expectation that I would personally pay them. I suppose that is due to the perception that Andersen Design is a free enterprise, but the museum and Andersen Design are conceptually separate entities, and until the museum is formed there is no legal entity that can pay anyone.
Based on my experience, I feel that to establish a team of people that I can work with, with certainty, I will need to pay them, starting with myself. Therefore, my first fundraising goal covers supplementing my own income by $2000.00 a month and paying for the services of a selected fundraising consultant and a selected equity firm. Both services approached me and in so doing recognized the value of what Andersen Design has to offer, this contrasts with my attempts at reaching out to local governments and organizations for many years and seldom receiving a response.
The fundraising consultant has a background in ceramic technology and works with Network for Good, which costs $200.00 a month to hire. While other salespeople quickly dropped me when they learned I had no money, this consultant is actively pursuing my account. and has persistently stayed connected waiting for me to have funds. A monthly charge allows one to try out the service and assess its worth.
The small equity firm, Marquee Equity is based in India, where the ceramic industry is a valued part of the economy. I was introduced to Marquee Equity through TealFeed, a knowledge-sharing platform based in India that features my newsletter. Tealfeed invited me to setup as a consultant and I asked if they had a mentor for creating a consultant profile but instead, Tealfeed identified the ceramics as the greater cause and connected me to Marquee Equity, which costs $5000.00 to make my pitch documents and stream them to interested investors. I need this kind of support. If these investments are successful, they will allow me to hire others in other capacities.
When I mention India, people often assume that If I were to work with an equity firm based in India it means our production would be in India, but that has not been the conversation. Marquee Equity knows that I want to do something locally. However, if the local community does not happen, it would be better to do something in India than to have our original molds thrown away so it’s a Plan B.
As I began, my newsletter is my primary means of connecting to the world and I use it to explore and expound upon economic development history and ideas. It is the only explanation for why I was invited to do peer reviews for Humanities and Social Sciences Communications, a global academic publishing venue. I review papers on economic development and learn much in the process. Recently, I was successful in changing the emphasis of a paper from ”psychological ownership”, which I interpret as an intentional illusion of ownership, to Psycap an identification of an individual’s psychological and creative constitution as a form of capital in an era when “innovation” is gold.
This is my researcher’s ID on Orcid.
Thank you for considering my request for local community financial support for my projects.
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