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Baltimore won't get HQ2, but neither will Montgomery County

While Baltimore did not make the cut to get Amazon's HQ2, Montgomery County did. Maryland Gov. Larry Hogan’s administration will submit legislation in the next few weeks to build a $5 billion incentive package to lure Amazon HQ2 to Montgomery County.

Take a quick look at the finalists for Amazon’s second headquarters, and one factor stands out: the nation’s capital. Montgomery County, Northern Virginia and Washington, D.C., itself are among 20 jurisdictions the company is considering for its “HQ2,” which comes with $5 billion in direct investment and 50,000 jobs.

No doubt this gives a boost to Montgomery County, especially after Discovery Communications recently announced it is trading its Silver Spring location for a home in New York City, leaving a gaping hole in efforts to revitalize the Washington suburb.

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But it also delivers a stinging blow to Baltimore, whose proposal winds up in the trash bin along with those of over 200 other hopeful areas around the country ranging from Detroit to Stonecrest, Ga., wherever that is. Even more disappointing is that Baltimore is close enough to Washington, D.C., if proximity is a criterion, easily accessible by commuter rail and interstate. Moreover, our elected officials wisely focused on promoting the city’s Port Covington site, which is emerging as a case study in successful urban planning, as a potential HQ2 home.

So, here we go again, part No. 1. Baltimore is still the largest American city without a Fortune 500 company, and it’s time our leadership address the root causes or accept the status quo: mind-numbing statistics on the murder rate; distrust among residents and the police; public schools that have difficulty providing heat, air conditioning and drinkable water. Let’s not forget our history of corrupt public officials.

If you want to know why employers have left, ask them. Baltimore’s tax burden — the highest in the state — is at the top of the list. Baltimore's property taxes are more than double the statewide average of local jurisdictions. A nearly 6 percent levy on businesses for capital equipment is also double that of other Maryland jurisdictions that impose the tax. Baltimore’s personal income tax is at the highest levels in the state. Taxes, murder rates, under-performing public schools make it very difficult for members of Amazon’s site selection committee to raise their hand for Baltimore.

As for the state itself, Maryland ranks 43rd in the country in the Tax Foundation’s latest business climate index. And what is the response of our legislature? How about new state mandates for sick leave pay and minimum wage increases. Maryland has been mired in the category of high-taxed states for over a decade. Will Amazon say that publicly and help us better chart our economic future? Of course not, nor is it their role to do so.

And, here we go again part No. 2: another possible economic contest between Montgomery County and northern Virginia, where the record of losing is striking. Northrop Grumman, SAIC, Hilton Worldwide, Volkswagen North America all opted to relocate to our southern neighbor in years past when Montgomery County was also in play for these corporate location decisions.

For too long, when it comes to economic development in Maryland, failure is indeed an option. Economic inducements may help mitigate a poor business climate, but any politician can cut a deal with Amazon. In Baltimore and Maryland as a whole, what they can’t seem to cut is taxes.

So excuse me for not being optimistic about Amazon’s final location decision later this year.

Jay Steinmetz is the CEO of Baltimore-based Barcoding Inc. He can be reached at jay.steinmetz@barcoding.com or on Twitter: @barcodeman.

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