A bill that would exempt a defense firm from paying $450,000 in annual hotel taxes to Montgomery County advanced in the Maryland Senate on Wednesday, following an outcry from county officials and other groups.
The bill, sponsored by Sen. Nancy J. King (D-Dist. 39) of Montgomery Village, follows a 2010 law that exempts corporations from paying hotel taxes on training centers and other lodgings that are only used by employees of the corporation, and applies that law to county taxes as well.
Lockheed Martin’s Bethesda training center is the only facility that falls under the requirements of the bill.
Montgomery County pulls in more than $19 million in revenue each year from the 7 percent hotel tax. About $450,000 of that comes from Lockheed Martin’s 180-room training center.
Originally, the bill called for the county to pay back taxes collected from the company since 2010, which would have cost an additional $1.4 million. On Wednesday, the Senate amended that provision out of the bill.
The proposal will likely get a final vote in the Senate on Monday.
The House version of the bill is sponsored by Del. Anne R. Kaiser (D-Dist. 14) of Burtonsville.
“Maryland state law currently recognizes that commercial hotel tax is not appropriate for corporate training facilities with sleeping accommodations unavailable to the public, such as Lockheed Martin’s Center for Leadership Excellence (CLE),” said Jennifer Allen, spokeswoman for Lockheed Martin, in a statement. “We welcome this new legislation that will ensure that the state’s law is applied appropriately and justly throughout all Maryland counties.”
The Montgomery County Council has agreed to actively oppose the bill, which Councilman George Leventhal (D-At large) of Takoma Park calls an “affront to charter home rule.”
“God forbid there should ever be a fire at that facility, but if there were, county fire would respond,” Leventhal said. “I would hate for there to be a crime there, but county police would investigate. There are costs associated with having that building here.”
County Executive Isiah Leggett (D) has twice tried to reimburse the company for the hotel taxes, once through the county council and once via a grant. The council both times rejected the proposal.
Another bill the council is speaking out against is proposed by Sen. Roger Manno (D-Dist. 19) of Silver Spring. It would require county governments to maintain current funding levels for most county departments, or risk losing state funding.
The measure is needed, Manno said, to keep county governments accountable for the funding they receive from the state.
“In Annapolis, there’s a general sense that as we take on a greater role in funding infrastructure and social services, there should be some accountability on those funds,” Manno said.
The bill was introduced late, and a hearing is scheduled for committee March 20.
King, who said she signed on as a co-sponsor at the last minute, predicted that the bill would not pass due to a lack of support.
“Why are they seeking these changes that violate charter home rule?” Leventhal said. “We should not be divided over these side issues. We want to work with our delegation to pass the transportation plan. That’s our number one priority.”