Monday, April 23, 2012

Montgomery Council President Roger Berliner Rejects County Exec. Ike Leggett's Corporate Welfare Plan for Lockheed Martin

BACKGROUND: Maryland Juice recently condemned Montgomery County Executive Ike Leggett's recent proposal to grant almost $1 million in tax cuts to defense contractor Lockheed Martin. We noted that the County Council had previously rejected this idea, and the expenditure of tax dollars was not projected to create any net new jobs or economic activity. Numerous outraged residents contacted MoCo policymakers to express their disapproval.

But last week, The Washington Post editorial board made an inexplicable pitch for the County Council to approve the taxpayer giveaway to Lockheed. Interestingly, The Washington Post has been singularly focused on fiscal accountability and government waste issues lately. That's why it is very strange to see them weigh in on a budget item that seems to clearly be a wasteful use of tax dollars.

Today, Montgomery County's Council President Roger Berliner penned a response to the Post's editorial. Mr. Berliner once again rejected Mr. Leggett's proposed corporate welfare project and outlined the spurious policy arguments used to justify this wasteful proposal. Notably, Mr. Berliner complains that the Leggett administration is trying to pay for the Lockheed welfare plan out of a fund designated for economic development. Indeed, these finite resources should only be spent where they will actually help grow Montgomery County's economy or spur new economic activity. Many small business owners, taxpayers, and government employees ought to be upset to see a profitable multi-national corporation receive a unique tax break when every other party to the budget process seems to be making a sacrifice. See an excerpt from his letter to the ed below:
ROGER BERLINER: ...While our council has yet to vote on the issue, the proposed grant, which would cover two years of county lodging taxes at the firm’s conference and training center, including a retroactive rebate, raises legitimate concerns.

First, council attorneys have concluded that there is no legal basis for exempting the center from the lodging tax. In 2010, when Mr. Leggett proposed legislation to do so, the proposal had so little support that it was never even considered. The council’s rejection was guided by a number of concerns: Lockheed Martin built its conference center well aware of the tax; the center competed with other hotels that paid the tax; and our scarce resources were needed in other areas.

Two years later, the county executive has proposed a different approach — an economic development grant — that raises other, equally challenging issues. The purpose of such grants is to provide incentives for a company to locate or expand in the county prospectively, not retroactively. Moreover, the council has received public testimony that Lockheed Martin charges hundreds of dollars a night to non-employees who stay at the center, which, if accurate, undermines the core argument that the facility is for its staff only.
CONCLUSION: It is unfortunate indeed to see cliche pork barrel line-items for special interests in good government Montgomery County. It is especially unfortunate to see this sort of lame policymaking happening when we really don't have enough money in our economic development fund for legitimate projects. We can't afford to waste precious taxpayer resources on corporate welfare -- especially if it doesn't actually create any new economic activity.

Ironically, Mr. Berliner (wearing his Council President's hat) recently brought in experts from the high tech and startup worlds to help brainstorm ways that Montgomery County could position itself for jobs in the "new economy." The County Council and MoCo's economic development director Steve Silverman heard testimony on what local governments can do to foster startup culture and attract high-tech jobs. Speakers included rep's from Google, Twitter's venture firm, and more.  A number of their suggestions would clearly cost money -- as noted by some Councilmembers. You can watch the fascinating conversation below, but it really does raise questions about why we are wasting money on taxpayer giveaways when we there appear to be an infinite number of better ways to spend such money. The description of the panel and speaker bios are available online.

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Tell the County Council & Economic Development Director Steve Silverman to reject Ike Leggett's proposed waste of tax dollars: The email address below will forward your message to all of them at one time.

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