Corporate tax giveaway lives on - A handful of delegates block reconsideration of last year's mistake

Let's start off with thanks to the clear majority of Montgomery County delegates who voted to allow the state to revisit the Maryland General Assembly's ill conceived corporate tax giveaway, custom fit to exempt the Lockheed Martin training facility with its 183 guest suites from the state's "sales and use tax." On February 4th, 2011, the Montgomery County House Delegation to the Maryland General Assembly took a vote on whether to file a bill to rescind the exemption.

Lockheed Martin's training facility fits the definition of a hotel and, last we checked, the corporation's website tells prospective visitors to expect nothing less than what they would find in a luxury hotel. Even if it weren't so similar to a hotel, the facility should be subject to the state's broadly defined “sales and use tax” which requires transient guests and lodgers to pay a tax.

The tax makes sense since visitors to the county and the state use public services like roads and public safety while they are here. If Lockheed Martin's guests and "other invitees" were staying at a mom-and-pop run motel or the Marriot, the tax would be charged.

Last year's decision to grant the corporation an exemption from applying the tax sailed through legislature with little debate or deliberation. The giveaway costs the state more than 1/3 of a million dollars per year at at time when all the legislature is talking about is: cuts, cuts, and more cuts.

Why certain legislators would feel sorry for Lockheed Martin or think the corporation needs extra incentives to do business in Maryland is a mystery. Lockheed Martin's CEO took home roughly 23 million dollars in compensation in 2009.

Moreover, the Montgomery County Council had the good sense to decline to consider a county level proposal similar to the state law. Last September, the council heard convincing testimony from peace groups, unions, greens, progressives and other community organizations opposed to the unfair exemption. Two state legislators from Montgomery County -- Sen. Jamie Raskin and Del. Ana Sol Gutierrez -- also testified that the state had made a mistake. The proposed county exemption would have cost the county government close to a half-million dollars per year in revenue.

Fast forward to February, 2011 when Senator Raskin submitted a bill to rescind the state tax exemption to the Montgomery County House Delegation to the Maryland General Assembly. Unfortunately, due to the timing of the submission, the proposal required a 2/3’s majority vote by the delegation to accept a late-filed bill and to schedule a public hearing.

Sadly, on the day the House delegation voted, four of the 24 legislators were excused and absent at the time of the vote. We know there were some valid reasons.

More disturbing, six delegates voted against reconsidering the exemption, and the 2/3 majority was missed by two votes. The nay-saying delegates were:

Del. Charles E. Barkley (D), District 39
Del. Kumar P. Barve (D), District 17
Del. C. William Frick (D), District 16
Del. Anne R. Kaiser (D), District 14
Del. Benjamin F. Kramer (D), District 19
Del. Kirill Reznik (D) District 39

Members of Progressive Neighbors, Progressive Working Group and Peace Action Montgomery advocated to have the question considered yet again when more members of the House delegation were present, but their overtures were rebuffed by delegates who voted "nay" the first time. Apparently, the issue could only come up again if one of the six who voted no made the request.

So no dice. For now, the Maryland General Assembly will not reconsider the corporate tax giveaway this year, and it lives on.

Good, transparent information will be important when voters make future decisions on their representation in Annapolis. Here's how the votes played out. Of course, we should thank the yea-sayers.

YEA (Thank you!)

Del. Brian J. Feldman (D), District 15
Del. Sam Arora (D), District 19
Del. Alfred C. Carr, Jr. (D), District 18
Del. Bonnie L. Cullison (D), District 19
Del. Kathleen M. Dumais (D), District 15
Del. James W. Gilchrist (D), District 17
Del. Ana Sol Gutierrez (D), District 18
Del. Sheila E. Hixson (D), District 20
Del. Ariana B. Kelly (D), District 16
Del. Susan C. Lee (D), District 16
Del. Eric G. Luedtke (D), District 14
Del. Aruna Miller (D), District 15
Del. A. Shane Robinson (D), District 39
Del. Jeffrey D. Waldstreicher (D), District 18

NAY (Disappointing ~)

Del. Charles E. Barkley (D), District 39
Del. Kumar P. Barve (D), District 17
Del. C. William Frick (D), District 16
Del. Anne R. Kaiser (D), District 14
Del. Benjamin F. Kramer (D), District 19
Del. Kirill Reznik (D), District 39

EXCUSED

Del. Tom Hucker (D), District 20
Del. Heather R. Mizeur (D), District 20
Del. Luiz R. S. Simmons (D), District 17
Del. Craig J. Zucker (D), District 14

LINKS

MC 18-11 Sales and Use Tax Exemption for Lodging at a Corporate Training Center - Repeal
http://www.montgomerycountydelegation.com/MC18-11.html

Vote tally, Feb. 4, 2011
http://www.montgomerycountydelegation.com/documents/HouseDelMCPG18-11late-filed.pdf

Lockheed Martin, CEO compensation
http://www.companypay.com/executive/compensation/lockheed-martin-corp.asp?yr=2010

Testimony before the Montgomery County Council Sept. 21, 2010
http://peaceactionmc.org/2010/10/06/another-win-lockheed-martin-tax-break-fails/

State, 2010 House Bill 855 and fiscal note.
http://mlis.state.md.us/2010rs/bills/hb/hb0855t.pdf
http://mlis.state.md.us/2010rs/fnotes/bil_0005/hb0855.pdf