The following article was posted in the 9/25/2022 edition of the Portland Press Herald, Maine Voices
Did it work? The question was asked in an Aug. 14 report about funding administered by the Maine Technology Institute: “Did it work? The elusive impact of a $45 million state grant to grow jobs.” My perspective is as chief financial officer of GWI, a Biddeford, Maine-based benefit corporation that designs, builds, and operates fiber optic networks – and a past recipient of an MTI loan.
While I understand the concern around transparency regarding publicly financed projects, there is a general expectation that doctors, attorneys and bankers keep client information confidential. MTI acts like a bank in many ways; if it violated the confidentiality of its clients, companies would not use it and its mission would not be completed.
MTI is designed specifically to make job creation-oriented grants and loans that risk-averse banks are unwilling to make. Taking that risk can lead to failure but also large wins. MTI is in the process of being fully repaid for our loan, plus interest, so it can redirect the money to other loans and grants. It was not clear to me that the article’s calculation of the cost per job creation took into consideration the repayment of loans and interest.
In our case, we took a $500,000 loan, subordinated to our bank debt, to build internal software that would allow us to be more efficient. This was a vital project that banks would be unwilling to loan against because the collateral was intangible. We would have not undertaken the risks of the project without MTI’s favorable terms. The risk was worth it for us and for Maine because the software has allowed us to almost double our employees – to about 90 – by the end of this year, a goal of MTI.
It has boosted employment by our local subcontractors in construction, technical support, marketing and other industries which support the broadband infrastructure ecosystem. And it has strengthened our ability to grow our business significantly outside of Maine, resulting in money flowing into Maine; another goal of MTI.
Finally, in our case, it has contributed to the very real (if indirect) benefit of more fiber optic networks for Maine, particularly in rural areas, allowing us to leverage of tens of millions of dollars in federal funding and private investment in Maine networks.
MTI’s engagement with the business community is immensely important. Taxpayer dollars, judiciously managed and disbursed to private companies, can bring about definable, verifiable, scalable and sustainable public good. We at GWI believe that current reporting mechanisms balance the public good with the requirements of a private company to have its confidential information protected.
The report correctly pointed out that there must be accountability and transparency; we believe there is ample opportunity for both. MTI must determine how best to use information about its funding, what the target audience is and how much of the data needs to be protected. To be sure, it’s a balancing act.
One possible way to achieve the balance is to bring MTI, the business community and the public together for a work session (or series of work sessions) to establish a mutually agreeable way forward.
MTI plays a vital and unique role in the funding of job creation and the growth of Maine’s economy. Fully evaluating MTI’s benefit requires taking the above factors into account. I am sure peers and colleagues of GWI would participate in endeavors to assist MTI and the public to determine the appropriate mechanisms of reporting these benefits in a better fashion.