Maryland House Democrats

Six companies apply for new Maryland job creation tax credit

Baltimore Business Journal - by Gary Haber Staff

Gov. Martin O'Malley visited Web security firm Cyber Point on Friday.
View Larger Gov. Martin O’Malley visited the Inner Harbor offices of a fast-growing cybersecurity firm Friday to urge companies to apply for the state’s new job-creation tax credit.

As of Friday, six companies, looking to add 30 new workers to their payrolls, have applied for the credit since the program went into effect March 25, state officials said. That was the day O’Malley signed legislation creating the $5,000-per-employee Job Creation and Recovery tax credit for companies that hire unemployed Marylanders.

The legislation sets aside $20 million in state funding for the program at a time when Maryland’s unemployment rate has been rising. It reached 7.7 percent in February.

“It’s our hope that the credit will accelerate the hiring of 4,000 people in our state off the unemployment rolls,” O’Malley said during his visit to CyberPoint International. O’Malley was joined on his tour of the company by Alexander M. Sanchez, secretary of the Department of Labor, Licensing and Regulation, and Christian S. Johansson, secretary of the Department of Business and Economic Development.

“We want to encourage companies on the verge of hiring someone to take that step now,” Johansson said of the tax credit program.

CyberPoint is an example of the kind of fast-growing employer state officials hope to be able to convince to add more workers through the jobs-creation tax credit. The company helps other firms protect their information technology and data.

CEO Karl Gumtow, said he started the company with three workers, including himself and his wife, in October, working out of his Baltimore condominium. Since then, the company has grown to 21 employees and moved to an office building overlooking the Inner Harbor, where it occupies an entire floor. Gumtow said he expects CyberPoint to grow to 100 employees within two years. A tax credit for creating new jobs could help in the company’s expansion, he said.

O’Malley also addressed briefly the status of the Maryland’s effort to attract the corporate headquarters of Northrop Grumman. The governor, in response to a reporter’s question, said the aerospace and defense contractor has narrowed its search to two sites, one in Maryland and one in Virginia. O’Malley declined to identify the sites although he described the Maryland location as a "nice campus site."

Maryland has been putting on a full-court press in its effort to lure Northrop Grumman Corp. (NYSE: NOC) and its 300 headquarters employees from Los Angeles. That effort has included enlisting Constellation Energy Group Inc. CEO Mayo A. Shattuck III and other prominent members of Maryland’s business community to contact Northrop Grumman officials to pitch the state.