Maryland Senate approves tax break for Northrop Grumman; House speaker is skeptical

The Maryland Senate approves a bill that would extend $37.5 million in tax credits to Northrop Grumman.

The Maryland Senate approved a bill Friday that would extend $37.5 million in tax credits to Northrop Grumman if the giant defense contractor maintains 10,000 jobs in the state.

The Senate voted 31-13 to pass the bill — supported by Gov. Larry Hogan — and send it to the House of Delegates, where it faces long odds of being approved before the General Assembly ends its session Monday.

During an extended debate, opponents argued that the measure is needed to form a partnership with one of Maryland's most important companies and help it compete with rivals receiving tax breaks from other states. Opponents decried the measure as "corporate welfare" for one of the state's most prosperous firms.

The bill would provide $7.5 million a year in tax credits to Northrop Grumman each year for the next five if it maintains 10,000 high-paying jobs in Maryland. The break would gradually decrease if the company falls below 10,000 jobs and disappear if its employment falls below 9,000.

The break comes on top of an already approved $20 million break for Northrop Grumman to combine two manufacturing plants and keep the headquarters of one of its units in Maryland.

Senate President Thomas V. Mike Miller, a supporter of the bill, predicted it could have trouble passing the House.

House Speaker Michael E. Busch said the bill could face a skeptical reception in his chamber.

"The House as a whole is less amenable to these types of initiatives," he said.

Busch noted that there wasn't a House version of the bill, which originated in the Senate. He said it would still have to receive a House committee hearing sometime in the few days remaining in the annual 90-day legislative session.

Hogan, a Republican, has done little to seek support for the Northrop Grumman measure, Busch said.

"We've been informed by [Commerce] Secretary [Michael] Gill, but we haven't heard anything from the governor's office," he said.

Busch questioned whether House Republicans would line up behind Hogan on the aid package. The speaker said he shares the concerns of some senators, who worry that the company could take the benefits but still leave the state in a few years.

If the legislature attempted to pass such a bill under former Gov. Martin O'Malley, a Democrat, Busch said critics would have said it smelled like "corporate welfare."

"Now, it smells like an expensive cologne," he joked.

mdresser@baltsun.com

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