Maryland Gov. Larry Hogan details Amazon pitch with $3 billion in tax credits, $2 billion in transportation projects
Maryland Gov. Larry Hogan released some details on Monday of his $5 billion pitch to lure Amazon to Montgomery County, proposing a "PRIME" Act that would give Fortune 100 companies that invest $5 billion in the state a series of tax breaks worth $3 billion.
Combined with $2 billion in proposed road and infrastructure projects, the incentives offered Amazon would represent the largest economic development package in state history.
Maryland’s plan is the second biggest public bid in the country to attract the internet retailer’s new headquarters and its promised 50,000 jobs and $5 billion investment. New Jersey has offered a $7 billion package to entice Amazon to open the so-called HQ2 project in Newark.
It promises $10 million a year for 15 years out of the state's Sunny Day fund to a Fortune 100 company that creates at least 40,000 jobs that pay an average of $100,000 a year. It also promises state and local property tax credits, a state sales tax exemption for construction materials, and a 10-year, annual tax credit equivalent 5.75 percent of the salaries of each job created.
Together, the administration said, the cash and tax credits amount to more than $3 billion.
The incentive package dwarfs any economic development deal Maryland has offered before.
The state was willing to pay a record $220 million — plus up to $97 million more from Prince George’s County — to land the proposed new FBI headquarters. The Trump administration put that project on hold.
The $150 million cash offer out of the Sunny Day fund would be more than seven times bigger than any previous distribution of cash from that account. So far, the largest Sunny Day deal was $20 million approved in 2016 for Northrop Grumman to keep 10,000 jobs in the state — roughly $2,000 per job kept. Amazon would be paid $3,750 per job created.
Like Amazon, Northrop was granted a specially designed tax credit to benefit it. The aerospace company can get up to $37.5 million over five years for retaining 10,000 jobs that have an average salary of $85,000. The proposed Amazon tax credit is structured differently, but the company would get a $5,750 tax break each year for every job with a $100,000 salary, and the benefits would last for a decade.
The Amazon proposal also offers breaks on state and local property taxes, and promises to use state tax dollars to cover half of the company’s local property tax tab.
The Amazon package requires General Assembly approval, which is not guaranteed.
The Democrats who lead the legislature told The Baltimore Sun last week
they were cool to offering huge incentive packages unless the governor made sure the state could afford all its current needs.
House Speaker Michael E. Busch, an Anne Arundel County Democrat, said it was a “tough pill to swallow” and noted the state was behind on school construction.
Senate President Thomas V. Mike Miller said the governor must restore funding for a struggling hospital in Prince George’s County before he would consider the incentive package.
Both men said they were less inclined to support the deal now that Amazon picked wealthy Montgomery County, not economically depressed Baltimore, as its preferred site in Maryland.
Maryland Gov. Larry Hogan details Amazon pitch with $3 billion in tax credits, $2 billion in transportation projects
