2018 | Politics

Leggett, Maryland Commerce Secretary Urge General Assembly To Approve Amazon Incentive Package

State released a study Wednesday that found the company would add $ 7.7 billion in wages to Maryland's economy if second headquarters was built in Montgomery County

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Maryland Commerce Secretary Mike Gill

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Montgomery County Executive Ike Leggett appeared in state House and Senate committee hearings Wednesday to urge representatives to pass a proposed package of tax credits and exemptions to help convince Amazon to build its second headquarters in the county.

Leggett was joined by Maryland Commerce Secretary Mike Gill, who called Amazon’s new headquarters project a “once in a couple generations opportunity.”

Leggett told lawmakers that the county is prepared to welcome the influx of new workers and make way for construction if the company were to select a proposed site in Montgomery County, which was named one of 20 finalists by Amazon in its search for a new North American headquarters. The company is expected to announce its choice later this year. County officials have said the White Flint area has been pitched to the company for the new headquarters, although it hasn’t been formally confirmed.

“This is an investment with a huge payoff,” Leggett said to members of the House of Delegates’ Ways and Means Committee.

The state Senate and House are considering companion bills that would provide Amazon with an income tax credit based on the jobs it creates, a tax credit against state and local property taxes, and  a sales and use tax exemption on certain purchases. The tax-related incentives are valued at about $3 billion. The state is also offering to make about $2 billion in unspecified transportation improvements if Amazon decides to locate in Montgomery County.

When asked about those potential transportation improvements, Leggett said they would include investments in Metro and the local road network “in and around Montgomery County.” He did not provide other details.

Amazon has said it plans to employ about 50,000 workers at the headquarters and estimates construction costs at about $5 billion.

On Wednesday, the state’s Department of Commerce released a study by Baltimore-based Sage Policy Group that estimated the project would contribute about $17 billion in additional economic activity and pump about $7.7 billion more into annual workers’ wages in Maryland.

The study determined the ancillary effects of Amazon would result in about 101,000 total jobs and produce about $280 million in additional annual county tax receipts and $483 million in annual state tax receipts.

“Amazon’s HQ2 is the greatest economic development opportunity in a generation, and this study confirms just how transformative this project could be for Maryland,” Gov. Larry Hogan said in a statement about the study. “From the construction phase, to when the headquarters is fully operation, Maryland would reap unprecedented benefits.”

State Sen. Roger Manno (D-Silver Spring) was among the few lawmakers who questioned whether the incentive package should be approved. He wondered whether “the juice is worth the squeeze” if the proposed jobs weren’t high quality and employees didn’t have the right to collectively bargain.

Leggett responded that Amazon plans to bring high-paying jobs to the headquarters and that local unions in the county are supportive of the efforts to attract the company. He also said he believes the investments will not only help to create other jobs in the state, but also expand the tax base to provide more long-term funding for education.

The incentive package legislation requires Amazon to hire at least 40,000 workers at the new headquarters for jobs that pay an average of $100,000 over a 17-year period as well as spend at least $4.5 billion on construction-related expenses. If approved, the incentives would go into effect on June 1.

Gill noted that the state has had an “excellent” experience dealing with Amazon’s logistics center in Cecil County and warehouse in Baltimore city.

“They’ve done everything they said they would do,” Gill said.

Earlier he told the committee, “If Montgomery County wins, every corner of the state of Maryland wins and wins significantly.”