Share

Montgomery County panel approves bill to allow stock purchases

|
Local,Maryland,Andy Brownfield,Montgomery County

Montgomery County lawmakers signed off on an incentives bill Monday that would allow the county to purchase stock in companies located within or moving to the county.

The measure would allow the county to purchase up to a 25 percent stake in a company it offered incentives to.

Councilman George Leventhal, D-at large, gave the bill his tepid support.

"This makes me really nervous," he said. "We, the council, can almost never say no [to offering businesses incentives]."

Montgomery County already offers businesses a number of incentives to relocate to or stay in the county, such as grants, loans or tax credits. The investment measure, which now goes before the full council, would allow the county to make an equity investment in them, as well. That investment would take the form of the county taking an existing grant or loan to a business and converting that to stock.

When the state legislature voted to allow such investments in 2010, opponents raised concerns the purchases would be gambling with taxpayer money.

The committee vote came after council members heard a report that companies that had received incentives in the form of grants or loans from the county had underperformed on promises to create or retain jobs in Montgomery County.

The report, done by the county's investigative arm, showed that companies receiving incentives failed to deliver on 3,529 jobs out of 26,775 they had promised.

Despite that, the report found that the county aligned with the best standards used by governments that offer such incentives.

Leventhal suggested the county adopt rules that require businesses to prove that each dollar of taxpayer investment resulted in money being made for the county.

"They are taxpayers dollars that we are taking away from pre-K or ... something else and giving to a private entity," he said, though the committee proposed no new rules.

However, while officials with the county Department of Economic Development said success was hard to quantify, incentives do work to bring companies to the county.

"I use this phrase, we're the icing on the cake, not the cake," said department Director Steve Silverman.

abrownfield@washingtonexaminer.com

View article comments Leave a comment