FacebookTwitterGoogle+RedditEmail

Corporate Welfare in Maryland

At this time of severe cutbacks in government funding for food stamps, early childhood education, and meals on wheels, some Maryland legislators are hard at work looking out for the welfare of one of the world’s wealthiest corporations.  Under a bill rapidly advancing in the legislature of that state, the Lockheed Martin Corporation will have the taxes on its luxurious Montgomery County hotel and conference center reduced by approximately $450,000 a year and will also receive a $1.4 million refund for the period since 2010.

Lockheed Martin would seem to be an unlikely recipient of this lavish government handout, at least on the basis of need.   Indeed, it is one of the world’s largest business enterprises, with sales that reached $47 billion in 2012.  It is also America’s largest defense contractor, and in fiscal 2012 its U.S. military sales topped $29 billion.

The effort to shovel millions of additional taxpayer dollars to this giant corporation goes back to 2010, when the state legislature passed a bill that exempted Lockheed Martin’s hotel guests from paying the state hotel tax.  Then, in 2011, the company asked to be exempted from the 7 percent hotel tax levied by Montgomery County, a suburb of Washington, DC.  Accordingly, the Montgomery County Council reviewed a bill that would change the definition of a hotel to exempt Lockheed Martin from this tax, too.  Nevertheless, after citizen testimony at a public hearing, the County Council refused to rewrite the law.  As a result, patrons of the hotel, grandly named the Center for Leadership Excellence, are forced to pay a lodging tax, just like patrons of all the other hotels in the county.

It should be noted that, when Lockheed Martin’s employees stay at the hotel, the company can usually pass on the costs to the appropriate federal contract.  Thus, in most cases, the federal government already compensates Lockheed Martin for any hotel tax it pays.

Lockheed Martin's hotel and conference center.

Lockheed Martin’s hotel and conference center.

In 2012, Ike Leggett, the County Executive, spearheaded a new effort to subsidize Lockheed Martin by proposing that the corporation be given a no-strings “grant” of $900,000 to compensate it for the hotel taxes it paid in 2011 and 2012.  But the county’s legislative analyst suggested that providing such a grant, without any information as to the extent to which the company had already been reimbursed by the federal government, would not be advisable.  Ultimately, the County Council refused to allocate the grant to Lockheed Martin.

Lockheed Martin maintains that its conference hotel is a “private” facility, solely devoted to training its employees, and for this reason its guests should not have to pay the tax.  And it is true that Lockheed Martin decides who can reside there.

But the 183-room hotel is not, in fact, limited to Lockheed Martin employees.  It is available for contractors, vendors, and anyone else the company welcomes.  For example, the business school of the University of Southern California held a conference there in October 2012, with attendees offered the option of staying at the hotel for $225 per night or finding their own accommodations.  Benchmark Hospitality International, which manages the facility, advertises it online as “a private, full-service business-class lodging and conference center,” with a sports bar, fitness facility, lounge, and other amenities.

Faced with the unwillingness of the County Council to provide a multi-million dollar giveaway to this giant corporation, Lockheed Martin and its local enthusiasts have turned to the Maryland State Legislature for assistance.  Senator Nancy King, the chief sponsor of the new bill, argues that it is necessary to keep the Lockheed Martin hotel operating — although she has not specified why a corporation with $47 billion in revenues cannot manage this feat on its own.  She has acknowledged that, under the legislation, Lockheed Martin will be the only company throughout the State of Maryland that qualifies for the exemption from the hotel tax.

With the bill for tax exemption and a refund already approved by a Maryland Senate committee, it seems likely that the bill will be brought to the Senate floor for a vote on March 11.  Maryland’s House of Delegates will consider it thereafter.

Citizen activists, especially from Montgomery County, are outraged by what they are calling the “Corporate Welfare for Lockheed Martin” bill.  One of their leaders, Jean Athey, terms it “blatant corporate welfare for one of the wealthiest, most profitable companies in the nation.”  She asks:  “Why, in a time that WIC supplements for babies and pregnant women are being cut, when children are being deprived of Head Start, when unemployment benefits are being reduced . . . should one of the wealthiest companies . . . receive this kind of special tax favoritism?”

It’s a question well worth considering.

Lawrence S. Wittner is professor of history emeritus at SUNY/Albany. His latest book is “Working for Peace and Justice: Memoirs of an Activist Intellectual” (University of Tennessee Press).

More articles by:

Dr. Lawrence Wittner is Professor of History emeritus at SUNY/Albany and the author of Confronting the Bomb (Stanford University Press.)

January 16, 2019
Patrick Bond
Jim Yong Kim’s Mixed Messages to the World Bank and the World
John Grant
Joe Biden, Crime Fighter from Hell
Alvaro Huerta
Brief History Notes on Mexican Immigration to the U.S.
Kenneth Surin
A Great Speaker of the UK’s House of Commons
Elizabeth Henderson
Why Sustainable Agriculture Should Support a Green New Deal
Binoy Kampmark
Trump, Bolton and the Syrian Confusion
Jeff Mackler
Trump’s Syria Exit Tweet Provokes Washington Panic
Barbara Nimri Aziz
How Long Can Nepal Blame Others for Its Woes?
Glenn Sacks
LA Teachers’ Strike: When Just One Man Says, “No”
Cesar Chelala
Violence Against Women: A Pandemic No Longer Hidden
Kim C. Domenico
To Make a Vineyard of the Curse: Fate, Fatalism and Freedom
Dave Lindorff
Criminalizing BDS Trashes Free Speech & Association
Thomas Knapp
Now More Than Ever, It’s Clear the FBI Must Go
Binoy Kampmark
Dances of Disinformation: The Partisan Politics of the Integrity Initiative
Andrew Stewart
The Green New Deal Must be Centered on African American and Indigenous Workers to Differentiate Itself From the Democratic Party: Part Two
Edward Curtin
A Gentrified Little Town Goes to Pot
January 15, 2019
Patrick Cockburn
Refugees Are in the English Channel Because of Western Interventions in the Middle East
Howard Lisnoff
The Faux Political System by the Numbers
Lawrence Davidson
Amos Oz and the Real Israel
John W. Whitehead
Beware the Emergency State
John Laforge
Loudmouths against Nuclear Lawlessness
Myles Hoenig
Labor in the Age of Trump
Jeff Cohen
Mainstream Media Bias on 2020 Democratic Race Already in High Gear
Dean Baker
Will Paying for Kidneys Reduce the Transplant Wait List?
George Ochenski
Trump’s Wall and the Montana Senate’s Theater of the Absurd
Binoy Kampmark
Dances of Disinformation: the Partisan Politics of the Integrity Initiative
Glenn Sacks
On the Picket Lines: Los Angeles Teachers Go On Strike for First Time in 30 Years
Jonah Raskin
Love in a Cold War Climate
Andrew Stewart
The Green New Deal Must be Centered on African American and Indigenous Workers to Differentiate Itself From the Democratic Party
January 14, 2019
Kenn Orphan
The Tears of Justin Trudeau
Julia Stein
California Needs a 10-Year Green New Deal
Dean Baker
Declining Birth Rates: Is the US in Danger of Running Out of People?
Robert Fisk
The US Media has Lost One of Its Sanest Voices on Military Matters
Vijay Prashad
5.5 Million Women Build Their Wall
Nicky Reid
Lessons From Rojava
Ted Rall
Here is the Progressive Agenda
Robert Koehler
A Green Future is One Without War
Gary Leupp
The Chickens Come Home to Roost….in Northern Syria
Glenn Sacks
LA Teachers’ Strike: “The Country Is Watching”
Sam Gordon
Who Are Northern Ireland’s Democratic Unionists?
Weekend Edition
January 11, 2019
Friday - Sunday
Richard Moser
Neoliberalism: Free Market Fundamentalism or Corporate Power?
Paul Street
Bordering on Fascism: Scholars Reflect on Dangerous Times
Joseph Majerle III – Matthew Stevenson
Who or What Brought Down Dag Hammarskjöld?
Jeffrey St. Clair - Joshua Frank
How Tre Arrow Became America’s Most Wanted Environmental “Terrorist”
Andrew Levine
Dealbreakers: The Democrats, Trump and His Wall
FacebookTwitterGoogle+RedditEmail