This month, the President of the County Council introduced a new resolution at the request of our County Executive, David Craig. It is Resolution 3-14, an Economic Opportunity Fund Loan for Kohl’s Department Stores, Inc., and can be found at the Harford County Council website under ‘Current Bills and Resolutions.’ This of course is not the first government loan to a private corporation this county has seen. In 2012 alone the County Council approved 3% interest county loans to Bizerba Label Solutions and BAFS, Inc. for $100,000 and $200,000, respectively. We’ve also seen a $100,000 Workforce Training Grant issued to Smith’s Detection, and Council approval on $23 million in Tax Increment Financing to the James Run Developers. We could probably fill hours of debate on the merits or hazards of these types of public-private partnerships and if the jobs created are worthwhile enough to warrant thousands of dollars in taxpayer money. However, in the Kohl’s Resolution, Harford County will be deciding upon their first ever ‘conditional loan’, and setting a dangerous precedent for the future of Harford County business.
A conditional loan is a low-interest loan issued which accrues interest on the principal borrowed, but does not require monthly payments from the company borrowing the money and is often forgiven at the end of the specified term. In the case of the resolution introduced February 12th, Kohl’s is being offered a $400,000 conditional loan from the state of Maryland and a $100,000 conditional loan from Harford County in exchange for locating a new e-commerce distribution center in Edgewood and creating a minimum of 550 jobs at the site. The Harford County Office of Economic Development has asked that Kohl’s fill at least half of those jobs with Harford County residents, but that is not a condition needed to receive the monies offered. In fact, in the proposal letter sent to Kohl’s on March 30, 2011 Kohl’s is assured that the county has “established a ‘job access/reverse commute’ bus service from Baltimore City’ that will be available for every warehouse shift.
Also included in the ‘goodie bag’ of incentives offered to Kohl’s were the property tax credits and job creation credits that come with buying property in a Maryland Enterprise Zone. In December 2011 Harford County had already granted the Enterprise Zone designation to Kohl’s, which is estimated to save the company $2.3 million in County taxes and $650,000 in state taxes over the next ten years. The job creation tax credit adds another $893,000 in state tax credits. The Office of Economic Development has already given the company a $50,000 grant with which to train its new employees. Kohl’s also benefits from the superior infrastructure of our state roads, and from being strategically located near BWI and the port of Baltimore. Why the need then to give away another $500,000? Will this company seriously consider uprooting a $90 million dollar center if they don’t get a positive vote from the county?
We are fortunate that our state and local governments cannot operate as the federal government does, with a mounting deficit and no budget in place. But that does not mean the Maryland legislature or county officials should hand out grants and giveaway loans to every company considering a move to Maryland. When we begin to consistently operate in this manner we see increasing bond debt, suspicious backroom deals and companies calling the shots. Furthermore, we do not lose companies to Delaware and Virginia because they give out bigger goodie bags of incentives; we lose companies like Bechtel Corp and tech firm Acentia because our neighboring states have far more advantageous corporate and personal tax rates. Financial tricks like TIFs and conditional loans are not the answer to bringing new business into the state.
Our County Council will hold their public hearing for Resolution 4-13 on March 12, 2013. Please call or email your Council Representative as soon as possible, and tell him or her to vote NO on this resolution. If you can, make plans to attend the hearing at 7pm, and speak your mind. This is a half million dollars of our hard-earned money. Tell your elected official you want your hard-earned money to go toward roads, schools and county buildings, not a department store. We need to stick to responsible fiscal policies if we want Harford County to continue to grow and thrive.
The County Council offices are at (410) 638-3343. Please call or email today. For more information on fiscal responsibility and how to advocate for it locally, visit www.harfordliberty.org.
Steering Committee Member
Harford Campaign for Liberty