Ann Costlow would like to offer medical insurance to her new employees at her small restaurant chain, Sofi’s Crepes.
But insurance costs have escalated so fast that she has had to substantially increase deductibles and premiums that employees pay and not offer a medical plan to new hires, Costlow said during a symposium on job creation last week in Annapolis organized by state officials.
“Health insurance costs have increased about 20 percent a year,” she said. “I don’t know of any other industry where costs have increased so fast.”
State officials should look into regulating health insurers to try to contain costs, said Costlow, a former stockbroker who founded Sofi’s Crepes in 2004 in Baltimore. The 50-employee business has since expanded to locations in Annapolis and the Baltimore area.
That suggestion was one of several issued by business executives during the seminar. Other topics discussed at the Dec. 9 meeting included new laws such as one limiting signs near roadways, business taxes and streamlining the state permit process.
Recovery Point, a Gaithersburg disaster recovery company, is among the Maryland companies that have been able to maintain health insurance for employees while beefing up its work force in the last three years.
The company has added about 25 percent more employees in three years, growing to about 90, said Dick Fordham, director of corporate strategy. Recovery Point is still hiring in information technology and other departments, he said.
“We don’t have a specific number of hires in mind,” Fordham said. “It’s based on the contracts we obtain. If it goes as we hope, we could increase our work force by another 25 percent in the next few years.”
W. Daniel White, executive vice president at Baltimore construction giant Whiting-Turner Contracting, applauded Gov. Martin O’Malley’s recent order to review state regulations and streamline permitting processes.
“It can take a year or more just to get a permit,” said White, also a board member of the Maryland Chamber of Commerce. “I’d like to see [the streamlining process] extended to occupancy permits, which can get bounced around from department to department.”
O’Malley (D) said the state needs to make “modern investments” in infrastructure, as he detailed programs such as InvestMaryland, a new initiative designed to boost venture capital in high-tech companies by $70 million.
State analysts should review bills filed in the General Assembly for their impact on all businesses, figuring out how many jobs would be created or lost if the proposal was approved, White said.
Investing in infrastructure, such as roads and airports, should be high on legislators’ lists, said Maureen McAvey, executive vice president of the Urban Land Institute and a former executive for Rockville development firm Federal Realty Investment Trust.
“America has been resting on its laurels in infrastructure investment,” McAvey said. “We did a lot in the 1950s and 1960s, but not as much since then.”
An Ocean City hotel owner said the large increase in unemployment taxes, which went to shore up the trust fund, had a big impact on her business, as she had to lay off a few employees. State officials said the tax does not apply to seasonal employees.
kshay@gazette.net
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