Several Maryland lawmakers wondered aloud Wednesday whether Gov. Larry Hogan’s huge incentive package to lure Amazon’s second headquarters is too generous — or whether it should be offered at all. But a House committee voted by a slim margin to advance the plan another step toward passage.
“Let’s bring Amazon home, baby,” Del. Jay Walker (D-Prince George’s) said ahead of the count.
The bill received exactly the 12 “yes” votes needed for the 23-member committee’s approval. Six members voted against it, one abstained and others were absent.
The passage with no votes to spare could presage a lively debate as the bill reaches the floor of the full House on Thursday. The Senate voted 35-11 last week to approve the bill.
Hogan administration officials say the $5 billion package would give the state a clear advantage over others trying to woo the second headquarters and its anticipated 50,000 jobs, and they’re bullish on their odds. They call it a once-in-a-generation economic development opportunity.
“We are incredibly well positioned, and I’d argue better than anybody else, to be the landing spot for Amazon’s HQ2,” Chris Carroll, the governor’s policy and legislative director, told the House Ways and Means Committee.
Carroll said Amazon expects to make a decision by year’s end, and if Maryland lawmakers approve the incentive package, it will put the state ahead of others with legislative schedules that don’t allow them to do likewise. (Amazon chief executive Jeffrey P. Bezos owns The Washington Post.)
“That allows Amazon to confidently choose Maryland because they know that our incentives are in place,” Carroll said. This would come on top of the area’s other advantages for Amazon, he said, such as good schools and infrastructure.
Of the final 20 locations on Amazon’s list of potential picks, there are three in the Washington region, including Montgomery County. The others are in Northern Virginia and the District.
But some lawmakers look skeptically on Amazon’s potential arrival, considering already overcrowded public schools and overtaxed transportation systems.
“Montgomery County has so much economic development, they have so much high-tech in the county now,” said Del. Frank S. Turner (D-Howard), vice chairman of the committee and one of six “no” votes. “How is this going to fit if we do get Amazon there?
“It’s something we need to think about now, not after they come,” Turner added.
Del. Jimmy Tarlau (D-Prince George’s) agreed, saying the state shouldn’t compete with others to see who can cut the biggest break to big corporations.
“Amazon doesn’t need the money,” he said. “It makes billions of dollars, and we’re just adding to their profit line.”
Other lawmakers spoke in support of the package, but questioned whether it was the right amount.
“How do we know that we shouldn’t go further or even smaller, and how do we know they won’t come back and ask for more,” said Del. Alonzo T. Washington (D- Prince George’s), who voted yes.
Del. Nick Mosby (D-Baltimore) offered an amendment to the bill requiring Amazon to periodically report on how it delivers on promises.
“I just don’t want to get caught up on a flashy object,” Mosby said. “Having zero checks and balances associated with the legislation for a 17-year period of time to me is misguided.”
Hogan administration officials responded that the state would monitor Amazon’s performance. But after Mosby’s amendment failed to win support, he voted against the bill. “We need to err on the side of caution,” Mosby said.
Hogan administration officials said the package is modeled after a bill the General Assembly passed last session awarding a 5.75 percent tax credit to companies that create new manufacturing jobs. In Amazon’s case, with 50,000 new jobs contemplated, that percentage generates huge numbers.
The bill offers Amazon $3 billion in tax credits and exemptions. The state does not have to put up any money in advance. Instead, for 10 years it would divert back to Amazon a portion of employees’ paychecks that would have gone to state income taxes. The governor’s plan also calls for $2 billion in transportation upgrades.
The Hogan administration touts an economic impact report that projects the Amazon project over time would boost wages in the state by $7.7 billion annually and increase total economic activity by $17 billion.
The study, by the Sage Policy Group, also said the Amazon project would generate $483 million in state taxes each year. At that rate, it would roughly cover the cost of Hogan’s $5 billion incentives package in less than 11 years.
Del. Eric G. Luedtke (D-Montgomery), who voted in favor, predicted that with no bill, there’ll be no Amazon. With passage, he said, “The worst that happens is we don’t lose anything, and the best thing that happens is 50,000 new jobs.”