Correction: Earlier versions of this article misstated the number of jobs Northrop Grumman must keep in Maryland in order to avoid having to pay back any of the incentive money it will receive from the state. The correct number of jobs is 10,000. The article has been corrected.
Maryland Gov. Larry Hogan (R) and top Democratic lawmakers say they have resolved a spending fight that had jeopardized a $20 million grant aimed at keeping aerospace giant Northrop Grumman in the state.
State Senate President Thomas V. Mike Miller Jr. (D-Calvert) and House Speaker Michael E. Busch (D-Anne Arundel) said a key legislative committee would allow the Northrop loan to take effect in exchange for Hogan’s supporting legislation next year that would provide equivalent funds to help local school districts pay for teacher pensions.
“This is a win-win for the state,” Busch said in a statement.
The fate of the Northrop grant fell into question this summer after a hearing before the legislative committee in charge of reviewing and approving the final terms of the agreement was canceled and not rescheduled.
Many Democrats at the time questioned whether the grant, which the legislature had approved, made sense in light of Hogan’s refusing to release $25 million that lawmakers had set aside for teacher pensions and school construction. The schools money was part of $80 million that Democrats bundled together in an all-or-nothing spending package that included items the governor did not support.
As part of the compromise announced Tuesday, Hogan will allow $20 million in state assistance for school pensions after the 2017 legislative session, and the 28-member Legislative Policy Committee, led by Miller and Busch, has scheduled a review of the Northrop grant for Dec. 13.
Miller and Busch also said they would gather support among lawmakers for an agreement Hogan helped cement with Marriott International that would give the hotel company about $20 million in state funding to keep its headquarters in Maryland. Montgomery County, where Marriott is based, agreed to pitch in about $20 million as part of the deal.
Hogan spokesman Doug Mayer said the compromise announced Tuesday aligns with the governor’s goals of helping Maryland employers, creating jobs in the state and providing additional pension relief for local schools. The state began to shift a share of the ongoing costs for teachers’ retirements to individual counties in 2013. The legislation that will be proposed in 2017 would be a one-year suspension of some of those costs.
“We are happy to have found common, bipartisan ground with the presiding officers on all three of these issues and look forward to continuing this progress in the upcoming legislative session,” Mayer said.
Miller and Hogan met at a U.S. Naval Academy football game a couple of weeks ago, Mayer said, and their conversation laid the groundwork for the unusual compromise between the governor and legislative leaders. Busch later “played a major role,” Mayer added.
Miller said in a statement that state lawmakers are “grateful and supportive” of Northrop and Marriott for providing jobs in Maryland and that public-school funding should remain one of the state’s top priorities. “Even in tough times, I believe we must do both.”
Money for the Northrop grant comes out of the state’s “Sunny Day Fund.” The firm must repay some or all of the money if it fails to keep at least 10,000 jobs in Maryland for the next 10 years and invest $100 million in capital projects in the state. Northrop also secured a five-year tax credit this year worth about $37.5 million, despite opposition from many Democrats.
“Northrop Grumman is pleased that Maryland’s Legislative Policy Committee will consider the Sunny Day loan in December, and we urge that the loan be approved,” said Northrop spokesman Tom Delaney.
Ovetta Wiggins contributed to this report.