“Economic incentives and more relaxed regulations are needed to attract oil and gas business that could and would go elsewhere.” In 2004, researchers investigated the effects of local fiscal policy on the location decisions of 3,763 establishments that began operations in Maine between 1993 and 1995, and found that businesses favor municipalities that spend high amounts on public goods and services, even when these expenditures are financed by an increase in local taxes. This suggests that a local fiscal policy of reduced government spending to balance a tax cut may attract fewer new
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