Tuesday, November 8, 2011

Bechtel Receives $9.5 Million Loan from Maryland, Still Moves Hundreds of Jobs to Virginia // The Story Emerges (Ignore the GOP)

In the midst of constant budget shortfalls, one of the tricky problems arising in Maryland (and perhaps others states), is that various corporations are shotgunning politicians with threats to move to Virginia if we don't hand over millions in taxpayer subsidies, loans, credits, etc. Bechtel was the latest participant in this game, having just received $9.5 million in loans from Maryland in exchange for keeping over 1,000 of its employees in Frederick.

Yesterday, we discovered they are still moving hundreds of jobs to Virginia, even after receiving the loan. Apparently some of those who negotiated the deal may have known that at the time of the loan. The Washington Post reported, "Some Democratic lawmakers all but acknowledged at the time that some Bechtel jobs would move out of state, and probably to Virginia." Now the full story appears to be emerging, and it is important to understand it, because already the anti-tax advocates are back at it claiming Bechtel moved the jobs because of high taxes:
...some Maryland Republicans who had supported the loan said last week that they were surprised to learn the company would still move several hundred jobs, and they blamed Maryland’s tax rates.
What a crock. Bechtel had apparently been talking about moving one of its divisions to Virginia for months and tax policy doesn't seem to be involved. Damn the evidence -- somehow the GOP always finds a way to complain that taxes are too high. Nevertheless, The Gazette reported:
Bechtel had been hinting at a move to Northern Virginia for months, in part, to be closer to federal military clients. The company already is active in Fairfax County, serving as the lead partner of Dulles Transit Partners....

“We look forward to opening our offices in Reston, Virginia, next year,” Bill Dudley, Bechtel president and COO, said in the statement. “The Reston Town Center area is an ideal location for Bechtel and makes the best sense for the long-term positioning of parts of our business. We will have a central, more convenient location to Washington, D.C., and the Reagan National and Dulles International Airports, which facilitates access to our domestic and international customers; and proximity to the Dulles Technology Corridor.”
The one interesting thing about the Bechtel loan is that it forces them to keep their remaining 1,250 employees in Frederick until 2018. It is unclear what the penalty for a violation of those terms would be. However, noting their logic for moving above, it seems that they just wanted to move their defense jobs to Virginia. Period. I guess we'll never know what would've happened in other scenarios, but Maryland Juice continues to hope that our corporate welfare dollars will mostly be spent for raids on other states' businesses.

The Gazette last week noted: "Maryland ranks third behind only Massachusetts and New Jersey in innovative, 'high value-added' services such as information technology and cybersecurity.... In work force education, the state was second only to Massachusetts." These sectors, plus biotech-NIH-FDA-related industries seem like good targets for some good-ole-fashion job pilfering. We can start in Virginia, of course. 

P.S. Yesterday Maryland Juice highlighted consistent research showing that Maryland millionaires did not move to Virginia and that we are in fact the most millionaire-dense state in the nation. Additionally, new research showed we are now #11 for business-friendliness. Amusingly, those who were previously attempting to exploit economic anxiety to try and push for more tax cuts kept issuing "sky-is-falling" prophecies about Maryland business unfriendliness. After seeing the new evidence, some are highlighting that Maryland may be perceived as bad for business. The implication from some would be that we should still cut taxes to counter these misperceptions. Uh, aren't they the ones creating that false perception?

1 comment:

  1. Well, when your solution to everything calls for infinite rounds of tax cuts and never-ending boondoggles to business, you end up with self-defeating "race to the bottom" analysis like this claptrap.

    Your efforts to engage Mr. Streiff in reality based discussion, while well-intentioned, are doomed to failure. He left the land of the rational several years ago. In his world, Maryland is a bad state for business because, well, Maryland is a bad state for business. It's a religious belief at this point, not to be challenged or questioned.