Two bills in the General Assembly are chafing the Montgomery County Council, placing mandates that could affect the county’s bottom line, according to council members.
One is a proposal that would exempt defense firm Lockheed Martin from a hotel tax currently applied to their training center. Another would require what’s known as “maintenance of effort” to apply to counties’ budgets.
“Both of these bills are an affront to charter home rule,” said Councilman George Leventhal (D-At large) of Takoma Park.
The council is aggressively opposing the bills, Leventhal said.
“Lockheed employs 5,000 people in Montgomery County,” sponsor Sen. Nancy J. King (D-Dist. 39) of Montgomery Village said. “They’re a good company, and we want to keep them around, and we want to keep them happy.”
Lockheed Martin’s 180-room training center in Bethesda is currently subject to the county’s 7 percent hotel tax, which brings in more than $19 million in revenue each year. About $450,000 of that comes from the company.
King’s bill, as written, would reimburse Lockheed Martin $1.4 million in taxes collected back to 2010, but an amendment is expected Wednesday to strike the reimbursement provision. The company would still be exempt from future taxes.
The Senate will likely approve the amendment, with a final vote as soon as Thursday. While King said the company would not be happy with the amendment, it was needed to assuage fears of some of her colleagues, she said, who have called the bill corporate welfare and a special interest bill.
In 2010, the General Assembly passed a bill exempting corporate training and conference centers solely used by company employees from the sales tax. King’s bill, she said, keeps county policies consistent with state law.
The only facility in the state that meets the requirements of the 2010 law and King’s bill is the Lockheed Martin training center, according to legislative analysts.
The maintenance of effort proposal, introduced on March 4, will require the county to maintain funding levels or lose state aid.
“In Annapolis there’s a general sense that as we take on a greater role in funding infrastructure and social services, there should be some accountability on those funds,” said Sen. Roger Manno (D-Dist. 19) of Silver Spring.
King, who is a co-sponsor on Manno’s bill, predicted that it will not pass because it lacks support.