by Katherine Sperduto ‘19
The popular company, Amazon, is on the hunt for a place to locate its second headquarters and Montgomery County is among the 20 city finalists determined this past January. With its main headquarters currently located in Seattle, Washington, the company recently announced in September that it wants to build what it is calling “HQ2,” a project that will create 50,000 jobs from a $5 billion investment.
As the competition among other places toughens, Montgomery County is amping up their game with a $8.5 billion tax incentive and infrastructure package that was passed by a bipartisan group of lawmakers in the Maryland General Assembly. Legislative analysts are now claiming that this package would cost state and local governments about $6.5 billion over the next 35 years in lost tax revenue and increased costs. Hence, many lawmakers are labeling this package as “unnecessary corporate welfare.”
Governor Larry Hogan introduced the Promoting ext-Raordinary Innovation in Maryland’s Economy (PRIME) Act in January of this year, which provides a package of state income, property, and sales tax credits and exemptions in order to enable Maryland to put forward the most competitive bid possible for Amazon’s second headquarters. Accompanied with this, a budget allocation of a $10 million-a-year grant from Maryland’s Sunny Day Fund was implemented along with a tax credit that amounts to about 6 percent of each job’s salary if Amazon agrees to provide at least 40,000 jobs and pay an average of $100,000 per year to its employees.
Some people are concerned that this new budget will lead to more people, more traffic and, most of all, higher rents and mortgages. An economic impact study done by the Maryland Department of Commerce confirms that Amazon’s second headquarters would possibly bring $17 billion in economic activity to Maryland, create more than 50,000 high-paying jobs, and add $7.7 billion in annual wages.
Some factors that could lead Amazon to choose Montgomery County are access to the area’s Metro subway line, proximity to great universities and some of the most highly educated homeowners in the nation