Gov. Larry Hogan unveiled a package of proposals Thursday afternoon to boost manufacturing jobs and expand workforce training programs.
Hogan said his proposals will help increase opportunities for workers as well as employers, especially in high-unemployment areas such as Baltimore, where he made the announcement.
“Even though Maryland has been experiencing tremendous job growth and business growth and economic progress, not all Marylanders and not every jurisdiction in the state is seeing the same level of economic improvement and success,” Hogan said during an announcement at the POWER House Community Center in the Perkins Homes public housing community in East Baltimore.
The governor’s office did not provide an estimate for how much potential tax revenue the state would forgo under the proposals. They range from tax incentives for manufacturing companies to cyber training programs for workers.
The centerpiece of Hogan’s plan is proposed legislation aimed at boosting manufacturing in areas of high unemployment. The bill would exempt new manufacturing companies that create jobs in designated high-unemployment zones from paying all state taxes for 10 years.
Existing manufacturers in those zones would get tax credits for each new job they create, and both new and existing manufacturing companies would be allowed to speed up the tax deductions they get as the value of equipment depreciates.
Hogan proposed a version of the manufacturing incentives bill last year, but it died in the General Assembly. This year’s bill eliminates the most controversial part of last year’s legislation: a provision allowing workers at new manufacturing companies to be exempted from paying state income tax for several years.
Existing manufacturing companies balked at that provision, saying their workers might flee to new companies to get the generous tax break.
Last year’s bill — including the income tax break for workers — would have cost the state a “significant” amount of revenue, according to a nonpartisan analysis by the state Department of Legislative Services.
Hogan’s proposal comes as the state must close a gap of roughly $544 million for next year’s budget. Legislative leaders have said they won’t look to pass new taxes or fees to balance the budget, meaning that spending cuts are likely.
The state government’s total budget is about $42 billion.
Hogan said he thinks he can get lawmakers on board with this year’s plan because it will help create thousands of jobs.
“I believe there should be very broad bipartisan support,” he said.
The governor was joined by Sen. Nathaniel McFadden, a Baltimore Democrat who sits on the Budget and Taxation Committee.
McFadden said he was encouraged by Hogan’s proposal and said he thinks lawmakers can “set politics aside” on this issue. But he didn’t offer full-fledged support.
“I have to get back to my colleagues — the devil’s in the details,” McFadden said. “We always have to look to see what the implications are.”
Sen. Roger Manno, a Montgomery County Democrat, sponsored a similar bill last year that also failed. He said Thursday he’s working on a new version for this year and has not discussed manufacturing incentives with the governor’s office.
“I would hope the administration would work with us, but we’ll have to see,” Manno said.
Manno said he’s tried to keep his bill nonpartisan. Of the state’s 47 senators, 43 co-sponsored his bill last year. Those sponsors included Democrats and Republicans.
Even so, he said, “politics have found their way into this, as they do with everything. The various versions of the bill have made for a more difficult process.”
Sen. Richard S. Madaleno Jr., vice chairman of the Budget and Taxation Committee, warned that changes in manufacturing tax laws likely to be made by President-elect Donald Trump and the Republican-led Congress make altering Maryland law questionable.
“If part of the federal manufacturing initiative is going to be to halve or cut by two-thirds the federal corporate income tax rate, what we would be adding on top of that would be meaningless,” the Montgomery County Democrat said.
Hogan also announced other job-related proposals on Thursday.
He plans an unspecified increase in money to open six Pathways in Technology Early College High Schools. Better known as P-TECH, the schools offer students a program combining high school and community college coursework, as well as work experience in technology fields.
Hogan also plans to spend $1 million on the Maryland Partnership for Workforce Quality, which helps businesses pay for training for their workers, and $3 million for cyber job training grants.
Hogan also would offer tax credits to investors who put money into cybersecurity startup companies. He did not offer details on the tax credits.
Mike Galiazzo, president of the Regional Manufacturing Institute of Maryland, said he was happy to see the governor propose both manufacturing incentives and help for job training. He said it’s important to boost the manufacturing industry.
“It provides good-paying jobs with benefits,” he said.
Baltimore Sun reporter Michael Dresser contributed to this article.