As Amazon Sales Job Begins, Hogan, Montgomery Face Host of Skeptics 

By Bruce DePuyt

The incentive package that Gov. Lawrence J. Hogan (R) wants to offer Amazon, the e-commerce giant considering whether to build its second headquarters in Montgomery County, faces numerous pockets of resistance from the General Assembly.

Most lawmakers have yet to be formally briefed on the plan, which many first read about Monday in The Washington Post, leaving them unsure what the merits of the proposal are.

Gill

Commerce Secretary Mike Gill

In addition, there’s potential opposition from several pockets of the assembly, including:

— Lawmakers from jurisdictions other than Montgomery County. The size of Hogan’s plan dwarfs anything the state has ever offered a private-sector employer, and most lawmakers queried by Maryland Matters said even a fraction of that money would make a big difference in the districts they represent.

— Lawmakers in both parties who view incentive packages as corporate welfare, a far-from-optimum use of taxpayer dollars.

— Small-government conservatives who believe it’s not the state’s job to pick winners and losers.

— The presiding officers, Senate President Thomas V. Mike Miller Jr. (D) and House Speaker Michael E. Busch (D), and the leaders of the committees that deal with fiscal issues, who want to make sure that the state’s approach to local challenges is equitable.

Miller has been largely supportive of the project, insisting the state can fund the Amazon incentives and myriad other regional needs. Busch has been a little more cautious.

“I think you have to see them all laid out there,” Busch said of the various competing interests vying for state dollars. “We’d also like to see what the governor’s package is [going to be] for the Kirwan Commission report and how he intends to pay for that.”

In fact, regional resentment seems most intense in Baltimore city, which is still smarting from a failure to make the Amazon Top 20 list, a city on edge over crime concerns, where the police commissioner just got bounced, and where some schools were so cold this month that children had to wear coats in class, sparking finger-pointing between city leaders and the governor.

Left unstated by most, but not all, lawmakers is whether an incentive plan to bring Amazon to Montgomery County, already the state’s wealthiest jurisdiction, is fair to communities with fewer advantages.

As the Post reported early Monday, two hours before the governor’s own announcement, Hogan is proposing $3 billion in tax incentives and grants, and $2 billion in unspecified transportation improvements.  But few details have been made public. When the Montgomery County legislative delegation and County Executive Isiah Leggett (D) met in Annapolis on Monday evening to discuss Amazon, they did so behind closed doors, billing the discussion a “caucus” meeting — and thus not bound by state open-meetings laws.

Hogan spokesman Douglass V. Mayer said formal legislation will be filed later this week.

Lawmakers are already offering counter-arguments that the money would be better spent elsewhere.

“It’s taking a risk with public taxpayer dollars,” Del. Mary L. Washington (D-Baltimore city), a member of the Ways and Means Committee, said Monday. “But if we invest in public education, it’s a guaranteed return.”

“Amazon would be great for the state of Maryland,” said Del. Jay Walker (D), chairman of the Prince George’s County House delegation. “But we have priorities in Prince George’s County that we need to fund too.”

On Tuesday, Hogan’s Commerce Secretary R. Michael Gill briefed Miller, and Hogan aides and Leggett began to push back against the skeptics.

Mayer said the company’s search is “a once-in-a-generation economic development opportunity. Gov. Hogan has a duty to make sure that Maryland puts forward the most competitive package possible.”

If Amazon comes, “it’s a win for the state, period,” Mayer said. “So yes, the package the state’s putting together is aggressive.”

With Amazon pledging 50,000 jobs and $5 billion in annual economic activity at its “HQ2,” Leggett said, “If jobs come here at the level that we’re talking about … everyone in the entire state of Maryland will benefit.”

Leggett noted that much of the governor’s plan consists of tax incentives, which don’t kick in unless the company moves to Montgomery, “so it’s not as though you’re writing a check of $3 billion-$5 billion to Amazon. … From an economic standpoint, this is a very easy case to make.”

Del. Ana Sol Gutierrez (D-Montgomery) said making the Amazon top 20 represents an endorsement of the county’s long commitment to good schools and quality services.

“It reaffirms that we have been doing the right things in Montgomery County. I’m thrilled,” she said.

3 comments

  • Incentive programs to get major corporations to locate in an area are taxpayer ripoffs. This one looks a lot like it is too. Bezos is richer than God, and doesn’t need our money to do whatever he’s going to do anyway.

  • Part of what the County must do is to fully fund school construction and operations. Presumably Amazon employees will want their children to attend schools that are not overcrowded and are appropriately staffed. Yet Ike Leggett is recommending cutting $80M from the overall school construction budget. He is also demanding that MCPS cut $25M from the current year’s operating budget. All this on top of his proposal, rammed through the Council last year, to cut capital bonding limits because we “just can’t afford it.”

    Many of us remember two short years ago when our taxes went up for an “Education First” budget. Cuts to education funding now would be a broken promise, and breaking your promises after raising taxes is a poor way to demonstrate to prospective investors in our County, like Amazon, that they can trust that Montgomery County will remain a great place to live, work, and do business.

  • A major reason why businesses are in Maryland is because the state includes a lot of high-income potential customers. We should feel no need to bribe them to come in or if they threaten to leave without getting some kind of tax break. It seems like we’ve already done too much of the latter.

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