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Md. legislative committee approves Northrop Grumman aid

(File)

As part its deal with Maryland, Northrop Grumman would receive $5 million annually and agree to keep a minimum of 10,000 employees at its Linthicum plant. (File)

ANNAPOLIS — A legislative committee gave its final approval Tuesday to one of the largest packages of state aid to a private company but not before two top Democrats expressed displeasure over being ignored by Gov. Larry Hogan.

The joint Legislative Policy Committee unanimously approved a $20 million, four-year aid package to Northrop Grumman two weeks after Hogan and the legislature reached a compromise that freed up the aid to the defense contractor in return for $20 million in aid to local pension plans for teachers.

Still, Senate President Thomas V. Mike Miller Jr. said the approval of the final piece of the Northrop Grumman package happened despite what he called Hogan’s lack of effort.

“We were not part of the negotiations,” Miller said. “We were expected to approve something that we were not part of the negotiations.”

Miller went on to express displeasure over Hogan not coming to the legislature to support his request, which included $37.5 million in refundable tax credits for the company, or even secure support from Republican legislators, some of whom voted with progressive leaning Democrats to oppose what they called “corporate welfare.”

“And so my message to you is it will never happen like this again,” Miller said, speaking to Department of Commerce Secretary Mike Gill. “We had to do what we had to do. This was the right thing to do. It wasn’t handled the right way by the executive or your office but it’s a deal that needs to happen. We made it happen but it can’t ever happen like this again.”

As part of the deal, the company would receive $5 million annually and agree to keep a minimum of 10,000 employees in Maryland at its Linthicum plant. Should the company fall below that number, the state could seek repayment of the loan at a rate of $2,000 per employee, plus interest. Falling under 9,000 employees would require the company to repay the full loan.

The forgivable loan is in addition to $37.5 million that the company can receive in state tax credits for generating new business. Those tax credits are refundable and will go to the company even if they do not owe state taxes as long as they meet benchmarks including increasing the amount of business brought into the state.

“Obviously there’s a lot of frustration in the legislature that they voted for a tax credit and we didn’t seem to have any information on what was going to take place with the Sunny Day Fund,” House Speaker Michael E. Busch said, referring to money earmarked for economic development. “There’s a lot of people who didn’t feel comfortable with this until they got all of the details.”

A similar, $70 million incentive package has been proposed to help keep Marriott International in Maryland. That deal includes tax breaks and $20 million in forgivable loans from the state’s Sunny Day fund, which will require legislative approval.

But Gill told Miller and Busch that every effort was made to keep the legislature informed.

“I felt personally that I stayed really engaged with the members, with you and the president with what was going on and what we were working on,” Gill said. “Just in keeping the communications flowing about the importance of Northrop Grumman and what we were trying to achieve. So, personally I wouldn’t change anything.”

A spokesman for Hogan expressed disappointment in Miller’s comments but praised the Senate leader and Speaker of the House for giving final approval to the deal.

“We all know Senate President Miller and his penchant for zany rhetoric but much of what he said today was incomprehensible and didn’t make a lot of sense,” said Douglass Mayer, a Hogan spokesman. “We’re not going to let his comments take away from what is a fantastic, bipartisan agreement to continue the partnership with this very important employer in our state. We couldn’t be more thankful for the presiding officers and their roles in this cooperative effort.”

State officials said the legislative approval clears the way for a written agreement to be sent to Northrop Grumman officials by the end of the day Tuesday.


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