A proposal by Prince George’s County Executive Rushern L. Baker III (D) to set up a fund to attract businesses is in limbo after some council members raised questions about how the money will be spent and whether there are sufficient checks and balances.
The council was scheduled to vote on a bill to create the Economic Development Incentive Fund before it adjourns in August, but the legislation is now stalled in committee.
After council members submitted a new round of amendments that Baker said risks bogging down the fund with bureaucratic requirements, the county executive told the County Council this week that he wanted to pull back the proposal.
“The major issue is oversight,” said council member William A. Campos (D-Hyattsville), who chairs the fiscal management committee. “I’m fine with the way the bill stands . . . I trust this county executive. But I think some are worried about who will be in office 10 years from now.”
The delay is a setback for Baker, who has made economic development a top priority of his administration. The $50 million fund, designed to increase the county’s commercial tax base and create and retain jobs, was one of Baker’s first major initiatives.
“We want the ‘wow’ factor,” Baker said Tuesday. But the plan, with changes pushed by the council, “would not allow us to be nimble enough,” he said.
Under the proposal, the county would act as a banker, providing loans to businesses. It could also dispense guarantees, conditional loans and grants. Funds would be offered, but not limited, to mixed-use development projects; transit-oriented development; land acquisition; purchasing equipment; and working capital, including training and relocation expenses. The loans would have to be repaid in less than 10 years, and the county chief administrative officer or his designee would determine rates and terms.
The Office of Management and Budget would assess applications before forwarding them to an independent panel of financial experts, who would examine the company’s financial history.
Campos said some council members raised concerns that they would not have final say over how the fund is spent. The legislation also does not allow the council to review expenditures of less than $1 million. Some council members would like a review to kick in at $250,000 or $500,000. Baker has agreed to lower the threshold to $500,000.
“It is a great opportunity, a great vision of the county executive, and we support that,” Council Chairwoman Ingrid M. Turner (D-Bowie) said. But she said the council is required to exercise oversight of executive branch expenditures.
“I am confident we will get it right,” she said.
Several amendments took the administration by surprise.
One amendment was introduced that would dramatically change the role of the independent panel of experts, allowing it to determine interest rates and the terms of loans. And others sought to add a minority business enterprise component to the bill.
M.H. Jim Estepp, president and chief executive of the Greater Prince George’s Business Roundtable, said he was disappointed that the measure was held up. “We should be focused on the creation of jobs,” Estepp said. “The council should be supportive. Businesses want to see that fund created. This should have been a No. 1 priority.”
Campos said the council will likely use the summer to resolve the issues. Once the council passes legislation to create the fund, the administration wants it to pass a bill allowing the expenditure of $7 million from the fund this year.
Baker, who said he expects to reach a compromise, plans to schedule town meetings throughout the county to explain his ideas about the fund to residents.