Legislative Panel Approves Northrop Grumman Loan

Maryland lawmakers unanimously approved a $20 million forgivable loan to aerospace giant Northrop Grumman Tuesday, the largest deal of its kind in state history.

The money will not have to be repaid if the company retains 10,000 jobs and proves it spent $100 million buying facilities in the state.

According to The Baltimore Sun,

It is the final piece of a $57.5 million retention package for Northrop, one of the state’s largest employers. The agreement touched off a partisan spat over transparency in business dealings.

Senate President Thomas V. Mike Miller urged his colleagues to vote for the deal, but chided Republican Gov. Larry Hogan’s administration for negotiating it privately. Miller promised he would not support such a deal in the future.

“Ordinarily, this wouldn’t have happened,” Miller told Hogan administration officials at a hearing in Annapolis. “My message to you is that it won’t happen like this again.”

Miller and House Speaker Michael E. Busch, both Democrats, said Northrop’s status as a major Maryland employer and its long-standing relationship with the General Assembly persuaded them to support the deal, despite legislators not being involved in negotiations and despite Hogan, a Republican, not personally seeking the legislature’s support.

Hogan’s spokesman, Doug Mayer, said the governor “absolutely” does not regret negotiating the deal without consulting lawmakers.

The sum is the largest ever to be dispersed from Maryland’s Sunny Day Fund, which was created in 1990 to stimulate big projects.

Before Tuesday’s vote, Northrop Grumman was already the recipient of what was the largest Sunny Day award, according to state records.

In 1998, the company received a then-record $11.5 million in exchange for keeping a division of its company in Anne Arundel County.

More deals are on the way. Hogan plans to use the Sunny Day fund next year to give Marriott $20 million to keep its headquarters in the state. State and Montgomery County officials have offered a package of tax incentives and loans that would total $44 million.

Should the deal be approved, it would be the second time in less than 20 years the state offered incentives to entice the company to stay here.

The Maryland Department of Commerce estimates Northrop’s 10,000 employees generate $42.9 million in state tax revenue per year.

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