Free Minds & Free Markets

Maryland Gov. Larry Hogan Takes Cronyism to the Next Level With $5 Billion Bid for Amazon Headquarters

The PRIME Act would fork over millions to one of the world's wealthiest corporations.

Gov. HoganCongressional Quarterly/CQ-Roll Call, Inc./NewscomAmazon has narrowed the list of places where it might put its second headquarters down to 20. Maryland's Republican governor, Larry Hogan, is so excited that Montgomery County made the shortlist that he's offering Amazon a new $5 billion package of incentives.

"Amazon sent a clear signal that Maryland truly is open for business by selecting Montgomery County as one of an elite group of contenders for this transformative project," Hogan said today as he unveiled the sycophantically named Promoting ext-Raordinary Innovation in Maryland's Economy (PRIME) Act.

The PRIME Act offers a lot of sweeteners. It includes 10 years of tax credits against any state and local property taxes, plus a 10-year exemption on any sales taxes owed by Amazon on purchases of construction equipment and warehouse equipment. Maryland would also give Amazon a 10-year tax credit to cover state income taxes paid by any employee Amazon hires within 17 years of setting up shop in the state, as long as that employee earns between $60,000 and $500,000.

And it's not just tax abatements. The proposal offers the online retailer $150 million in direct grants. Add the legislation's road, transit, and infrastructure upgrades, and the whole package comes to $5 billion—the same amount Amazon plans to spend on the new headquarters.

Luring businesses with corporate handouts is a long-lived American tradition. For instance, Washington state—home of Amazon's current headquarters—has given the aviation giant Boeing $11.9 billion to stay in town. Likewise, Amazon's competitor in the retail market, Walmart, is notorious for scooping up development grants, tax abatements, and any other form of pork it can from the jurisdictions where it sets up shop. The group Good Jobs First calculated in 2011 that Walmart was pulling down $70 million of these incentives annually.

The inevitable justification for these giveaways is that they will more than make up for the costs by bringing new jobs, new spending, and new investment to an area. Hogan, for example, says Amazon is offering "the single greatest economic development opportunity in a generation, and we're committing all of the resources we have to bring it home to Maryland."

Hogan is indeed bringing all the resources he can to bear with the PRIME Act, which at this point is the second most generous incentive package to be offered in the Amazon bidding war. (New Jersey had offered the company $7 billion.*) Yet every dollar the governor is offering will have to be paid by someone. If the PRIME Act passes and Amazon comes to Maryland, residents and businesses without the political clout of a multi-billion-dollar multinational will suffer a higher tax burden.

Maryland Senate President Mike Miller (D-Calvert) has already criticized Hogan along those lines, telling the Washington Post that he'd like to see the state give more aid to Baltimore and higher hospital funding in Prince George County before it offers billions to one of the world's wealthiest corporations.

Hogan won the governorship in deep-blue Maryland in part on his promise of creating a more business-friendly, fiscally responsible state government. His PRIME Act betrays those promises. And it encourages the other places on Amazon's shortlist to stoop even lower to cinch the deal. Reason TV highlighted highlighted the dangers of that in a recent, all too realistic, video:

CORRECTION: The original version of this article stated that no New Jersey cities made the final list of prospective Amazon HQ2 sites. Newark, New Jersey is still in the running.

Photo Credit: Congressional Quarterly/CQ-Roll Call, Inc./Newscom

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  • Libertymike||

    Forget Larry Hogan; I'll take his wife, Yumi.

  • chemjeff||

    Wow. That's some obscene level of crony right there.

  • Citizen X - #6||

    Larry Hogan looks like a bad guy from Dr. Who.

  • BestUsedCarSales||

    He also looks like Slimer from Ghostbusters.

  • Juice||

    Probably the chemo.

  • Citizen X - #6||

    I didn't realize one of the side effects of chemo was looking like Chuck E. Cheese gave up on himself.

  • Rhywun||


    Please tell me this isn't real.

  • Incomprehensible Bitching||

    Amazon, I promise, if you let me work from home, I'll pay you $20/hour!

  • Billy Bones||

    When your state does not have the credentials to attract new businesses--BRIBE!

  • Juice||

    Amazon would be making a huge mistake moving to the DC area, especially MoCo, but maybe they plan to be close to the halls of power and to start using them. That would be kind of scary.

  • chemjeff||

    I would not at all be surprised if Amazon chose either of the two DC-area locations. They will say "because we want to be on both coasts" but we will know what it really represents.

  • Juice||

    residents and businesses without the political clout of a multi-billion-dollar multinational will suffer a higher tax burden

    Is that even possible?

  • Johnny Hit n Run Paulene||

    And close to Bezos' WaPo too!

  • juris imprudent||

    Big alt-text fail... "clearly familiar with pork"

  • Sometimes a Great Notion||

    That had better cover my prime membership, Larry! Fuck this asshole, still better then O'Malley though.

  • Diane Reynolds (Paul.)||

    Why would anyone want Amazon in their city? All it does is raise taxes and create homeless people. Fact.

  • Holmes IV||

    I'm legit 99% sure you are correct. Do you have anything to back this up?

  • Diane Reynolds (Paul.)||

  • juris imprudent||

    Does quoting an idiot-sawant really count?

  • Diane Reynolds (Paul.)||

    Look, I provide a truth sandwich with Sawant filling... if it's too much for you rubes to stomach, I can't help you.

  • brokencycle||

    I'm against all cronyism, but on the one hand, we have Amazon getting $5B in handouts to cover a $5B project, and the author (and good jobs first) compared it to Walmart, who gets $70M/yr, employs far more people, and has $197B in PPE?

  • MoreFreedom||

    I sure hope MD gets Amazon. There's no better way to drive out businesses, they force them to subsidize their new competition. Obviously I don't live in MD or anywhere near there. Besides, it'd be great to see all the DC workers living in MD, get the benefit of fewer businesses, higher prices, higher taxes in their area, and state taxes on their Amazon purchases. That plus it makes it harder for MD to fund its government worker pensions. And those benefits won't last long for Amazon either, as MD continues to waste money on attracting new businesses (for as long as the subsidies last).

    I can enjoy my schadenfreude.

  • Arthur I Kirkland||

    I'm in full agreement with you here.

  • dantheserene||

    I hope Amazon give it to Maryland, good and hard.

  • Ned Netterville||

    I'm guessing Toronto. Bezos pokes a finger in Trump's eye by picking the lone site in Canada--taking all those jobs offshore, sorta, to make Canada great again.

  • Wanderer||

    Should it happen, expect a "Fuck Amazon In The Ass" act

  • The_Hoser||

    Maryland is disqualified simply on the ridiculousness of that acronym.

  • Pogue Mahon||

    "Promoting ext-Raordinary Innovation in Maryland's Economy"

    Typical government genius, they can't even get that right.

    Promoting Radical Innovation In Maryland's Economy (PRIME)

    You're welcome, you drooling retard.

  • I am the 0.000000013%||

    Is Amazon a big supporter of the $15 minimum per hour movement?

    If they are, it's genius.

    Amazon is already so far along the path to robot employees in their distribution centers and their new checkout free stores that if they can saddle their competition with employees that can never cover their wages, they will wipe those competitors out.

  • BYODB||

    Promoting ext-Raordinary Innovation in Maryland's Economy (PRIME) Act.

    Umm...Promoting Reinvestment and Innovation in Maryland's Economy?

    They should fire their acronym guy.

  • Arthur I Kirkland||

    I would do anything and everything I could to keep the sleeze that is Amazon out of my State. Maryland, the cesspool that it is, can have it.

  • vek||

    I hate stuff like this. If everybody would stop handing out free money like candy, then nobody would have to do it. Of course states could just have broad based low taxes that apply to EVERY business... Which would draw in tons of businesses of all sizes, without having to pass special laws every few years trying to bag a big prize. *Sigh*

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