Md. Senate Panel OKs $37.5M Tax Break For Northrop Grumman

ANNAPOLIS, Md. (AP) -- A Maryland Senate panel on Wednesday approved providing $37.5 million in tax credits over five years for defense contractor Northrop Grumman, if the company keeps 10,000 jobs in the state.

The bipartisan vote sends the measure to the full Senate. Supporters say it's an important tool to keep jobs in Maryland. Sen. Andrew Serafini, R-Hagerstown, said while it's a big tax credit, it comes with a large return and sends a message that Maryland is interested in accommodating businesses.

"As a business person, it's always better to keep the clients you have then it is to try to go get new ones," Serafini said. "It's much more expensive to try to go get new ones."

Opponents said it's a huge tax break steered to just one company. It would provide $7.5 million in tax credits a year for five years. Opponents noted Northrop Grumman already is getting a separate $20 million tax break from the state that is intended to keep the company's mission systems facility in Linthicum.

"We're just making a transfer from our treasury to Northrop's bottom line when, in fact, they're one of two enormous defense contractors who get almost all of their business -- a preponderance of their business -- already from the United States taxpayer," said Sen. Richard Madaleno, a Montgomery County Democrat who voted against the bill, along with Sen. Bill Ferguson, D-Baltimore, and Sen. Roger Manno, D-Montgomery.

The bill was filed at the request of the Maryland Department of Commerce in Gov. Larry Hogan's administration. Supporters and opponents of the bill noted that the Republican governor hasn't spoken out publicly in favor of the measure. Hogan didn't mention it at a news conference a day earlier, when he commented on progress of legislation he supports and opposes with less than a week in the session.

Matt Clark, Hogan's spokesman, said the governor obviously supports the bill.

"Of course the governor supports this legislation," Clark said. "This is a departmental bill that the secretary of commerce and senior members of the governor's staff have testified in favor of before legislators in a public forum. It's now up to the General Assembly to do the right thing and pass this bill."

But Madaleno said he believes Hogan isn't eager to publicly embrace the measure, because "if you were to look in the dictionary under corporate welfare, this is what would be pictured."

"He is trying to keep his fingerprints off of this, I'm sure, because I don't know if the public would really be happy to know he's giving them a $57 million thank-you card for doing nothing additional in the state of Maryland," Madaleno said.

(Copyright 2016 by The Associated Press. All Rights Reserved.)