Maryland Chamber Vice President of Government Affairs Ron Wineholt urged lawmakers to reject elements of the Budget Reconciliation and Financing Act (BRFA), SB87/HB 72. This legislation takes a variety of actions to balance the state budget by making changes to mandated spending and shifting funds from special funds to the general fund. The Maryland Chamber made a number of suggestions, including:
Stop Transfers from the Transportation Trust Fund: Since 1984, more than $1.5 billion in Transportation Trust Fund and Highway User Revenue funding has been transferred from those dedicated sources to the state general fund. Only about one-third of those funds have been paid back. The BRFA bill proposes to transfer another $100 million. With $40 billion in unmet transportation funding needs, the state should stop these transfers.
Reduce Hospital Assessment: The Chamber opposes the $255 million increase in the hospital assessment to fund Medicaid costs. This assessment will likely be passed on to users of hospital services in the form of higher health care costs and insurance premiums. Employers fund the majority of health insurance cost for two-thirds of Marylanders. The Maryland Chamber urged lawmakers to reduce or eliminate this new charge.
Oppose Permanent Cap on Vendor’s Sales Tax Allowance: The Maryland Chamber believes it is unfair to permanently cap the vendor’s allowance for collecting and timely remitting the sales tax. The allowance was already capped at $500 per month per vendor through June 30, 2011, as a result of legislation enacted during the 2007 special session. The sunset on that cap should be allowed to expire so that merchants can be appropriately compensated for the costs they incur in collecting the state sales tax.
Reform State Employee Fringe Benefits: The Governor’s proposed employee pension reforms are a step in the right direction. The Maryland Chamber urged lawmakers to take additional actions to contain costs, including transitioning from a defined benefit pension system to a defined contribution system for new hires and adopting health insurance benefit levels more consistent with private sector practices. “Businesses should not be asked to fund levels of fringe benefits for public employees that they cannot afford to provide their own employees,” Wineholt said.