Tuesday, January 26, 2010
UI Proposal Would Weaken System, Hurt Businesses
The Senate Finance Committee heard the Administration’s unemployment insurance (UI) proposal this afternoon. The Maryland Chamber opposes the legislation. Vice President Allyson Black and Unemployment Insurance Subcommittee Chair Ron Adler, President of Laurdan Associates, provided the Chamber’s testimony.
The legislation, SB 107, would permanently expand eligibility and benefits in order to make the state eligible for $126.8 million in federal stimulus funds. The bill would also authorize a one-year deferral of a small portion of the UI tax increase that became effective this year and establish payment plans to allow employers to spread their payments over a longer time frame.
The Maryland Chamber opposes this plan because we believe it would weaken the UI system and hurt businesses. The estimated cost of enacting the changes is nearly $20 million per year, at a time when the UI trust fund is paying out more in benefits than it is taking in.
Deferring unemployment insurance tax increases sounds appealing, but in the long run this proposal would weaken the unemployment insurance system and ensure that Maryland employers pay higher, more inequitable rates, for a longer period of time.
The Maryland Chamber strongly supports payment plan options for employers being proposed by the Administration. In meetings around the state, employers have responded favorably to the idea. Because of how UI tax rates are calculated, employers pay the majority of taxes in the first quarter. The proposed payment plans would allow them to spread the payments over time, while still collecting funds needed to replenish the trust fund faster.
Stabilizing Maryland’s unemployment system is crucial to the state’s economy and business community. We appreciate the Governor’s and General Assembly’s focus on this important issue.
The House version of the bill, HB 91, will be heard by the Economic Matters Committee on Thursday at 10:30 a.m. The Maryland Chamber will continue to work issue and keep you up to date. To view our complete position statement, click here (pdf). We encourage you to contact your lawmakers and ask them to oppose the bill. For more information, and a sample letter, click here.
For more information, contact Allyson Black at .
