2007 General Assembly Session Recap

Taxes and the Budget: There were no new major tax increases enacted this session, and little was done to address Maryland’s projected $1.5 billion budget deficit.

Numerous funding proposals were considered, but they appeared to be scattershot. Lawmakers introduced bills to increase the sales tax, income tax, gas tax and cigarette tax, as well as legislation to expand the sales tax to many professional services.

The Maryland Chamber urged lawmakers to consider the big picture and potential unintended consequences of this patchwork approach to a wide variety of tax changes. The Chamber recommended lawmakers conduct a comprehensive analysis of Maryland’s tax structure and use private sector experts – like economists, accountants and other professionals – to ensure it gains an accurate picture of the economic impact of proposed changes to the State’s tax structure.

According to newspaper accounts, Senate President Thomas V. Mike Miller would like to see lawmakers address the deficit during a special session this fall. Others want to wait until next session. Miller predicted that the solution would comprise a combination of budget cuts, a gas tax increase, sales tax increase, sales tax expansion to services, and the authorization of slots.

Slots: The General Assembly failed to act on legislation (SB 950) to authorize slot machines in Maryland to help provide the funding needed for the 2002 Bridge to Excellence in Public Schools Act, school construction, scholarships, and racing purses. The Maryland Chamber supported this bill as a reasonable step in dealing with Maryland’s projected $1.5 billion budget deficit.

Civil Liability: The Maryland Chamber defeated a number of bills that would have had a negative impact on Maryland’s business community, including:

• Legislation that would have adopted a system of comparative fault, allowing a person to recover damages for an injury even if they contributed to their own injury (SB 267/ HB 110).
• Legislation that would have imposed an unprecedented standard of liability for companies that previously sold lead paint based on their market share of sales (SB 660/HB 746).
• Legislation that would have removed the requirement in medical liability cases that a copy of a party’s report of a medical expert be attached to the certificate of merit (SB 642/HB 495).

Health: Small steps were taken to improve access to health care by authorizing discounts for small employers that participate in wellness programs (HB 339), providing greater flexibility to health insurance carriers in the types of health insurance products that they offer (SB 427/HB 579), and requesting a study (HB 572) of requiring higher income individuals to maintain health insurance. Unlike prior years, the General Assembly did not attempt to enact employer health care mandates. Legislation was also killed that would have authorized Canadian drug imports (SB 670) and disclosed employer names for businesses with more than 25 employees receiving state health benefits (SB 735/HB 924).

Transportation Funding: There were a number of transportation funding bills considered by the General Assembly. The bills proposed major changes to Maryland's tax structure while increasing funds into the Transportation Trust Fund (TTF). The Maryland Chamber offered strong support for finding new funding sources to increase the balance in the TTF. However, no one legislative proposal offered the ultimate solution.

The Maryland Chamber believes the State Maryland must find new sources of revenue to address the State’s transportation needs. Given the State’s projected $1.5 billion budget deficit, this task must be accomplished through a comprehensive analysis of all the State’s needs for the General Fund and the TTF.

Tax Credit Disclosure: The Maryland Chamber defeated legislation (SB 614/HB 983) that would have disclosed proprietary business information and damaged Maryland’s economic development efforts.

Security Breach: The Maryland Chamber successfully advocated passage of legislation (SB 194/HB 208) that will help safeguard personal information of customers and provide reasonable standards for businesses to notify customers if there is a security breach in data containing personal information.

Price Controls: The Chamber fought to defeat legislation (HB 927) that would have authorized the Governor to impose price controls on any good or service during a state of emergency.

Living Wage: The General Assembly enacted legislation (HB 430) to establish a minimum wage for employees working on state service contracts of over $100,000 at a level of $11.30 per hour in the six metropolitan counties and $8.50 per hour in the balance of the state. The Maryland Chamber strongly opposed this bill. At a time when the state should be looking for efficiencies in government, this bill creates significant new inefficiencies and costs. The bill will cause unfair competition for state contracts by pitting region against region and non-profits against for-profit businesses. It requires agency procurement officers to pre-judge what region of the state will win a contract before the bids are even received. The bill is unwise because it undermines the purpose of competitive bidding: getting the best service for the lowest price.

Eminent Domain: The Maryland Chamber successfully advocated legislation (SB 3) to amend Maryland’s eminent domain law. Small businesses, farm operations, nonprofit organizations, and owners and renters of residential property will now receive fairer and more just compensation when displaced in an eminent domain action. The General Assembly passed legislation that increases a number of caps, which had not been adjusted for almost forty years.

UI Maximum Weekly Benefits -- Compromise Reached: Labor groups pushed legislation (HB 1180) to increase the unemployment insurance (UI) maximum weekly benefit amount by $120 – $40 a year for three years. The Maryland Chamber worked to amend the bill to provide for a one-time benefit increase of only $40, beginning on October 7, 2007. Any future changes to Maryland’s UI system will be vetted through the recreated Joint Committee on Unemployment Insurance Oversight. Maryland Chamber’s UI Subcommittee Chairman Ron Adler sits on the Committee, along with other business representatives.

California Cars: The General Assembly passed legislation (SB 103/HB 131) adopting California’s emission standards and compliance requirements for motor vehicles. The Maryland Chamber opposed this bill because the State should not entrust its future to California’s Air Resource Board. Maryland would be better suited continuing to follow the federal Tier 2 Program, as it was designed to meet the air quality needs within this region.

Green Fund: The Maryland Chamber defeated this narrowly drafted legislation (SB 901 /HB 1220)that would have imposed an impervious surface fee. It placed a disproportionate share of the responsibility for run-off into the Chesapeake Bay on businesses and new homeowners. New developments are already required by law to mitigate by building stormwater management facilities to control run-off and reduce pollution.

Reduction of Greenhouse Gases: The Maryland Chamber defeated legislation (SB 409/HB 890) that would have established a statewide greenhouse gas emissions limit based on1990 emissions levels. If passed, all Marylanders would have been required to undertake major changes in their daily lives by driving 1/3 less and consuming 1/3 less electricity, for example.