‘Working to kill bills’

Chambers helped defeat sales tax, other measures, but lost on wages and cars

‘‘It seemed we spent a lot of time working to kill bills,” said Kathleen T. Snyder, president and CEO of the Maryland Chamber of Commerce, which organized legislative lobbying efforts. ‘‘We were successful in doing that in many cases. But we are concerned that little was done about the state budget deficit, which is projected to be $1.5 billion. We also supported increasing transportation funding, and not much was passed in that area.”

Labor groups scored a late victory with passage of the living wage bill on Monday, the final day of the session.

Gov. Martin O’Malley (D) said he would support the legislation in his State of the State address. It would make Maryland the first state with such a requirement.

The bill requires state contractors on projects worth more than $100,000, where at least 50 percent of the total value of the work is performed in Montgomery, Prince George’s, Howard, Anne Arundel and Baltimore counties or Baltimore city, to pay workers at least $11.30 per hour. The minimum in other parts of Maryland would be $8.50 per hour.

The living wage is one of a host of issues — including proposals that died designating lunch breaks and sick leave — that are often termed labor issues but ‘‘are more working-family issues,” said Fred D. Mason Jr., president of the Maryland and Delaware AFL-CIO. The average union member wages in Maryland are close to $20 per hour, he said.

‘‘That [living wage bill] benefits working families in general much more than it does directly benefit union members,” Mason said.

But Snyder said the measure undermines the purpose of the competitive bidding process — to get the best service at the lowest price — by artificially inflating wage levels of state contractors.

‘‘It will increase the cost of government, and taxpayers will ultimately be paying for that,” she said.

But those cost increases are likely to be negligible and offset by the positive effect of helping raise the living standards of lower-income people, said Sean Dobson, deputy director of Progressive Maryland, which lobbied for the measure. More than 100 jurisdictions across the nation, including New York City, have adopted such proposals, and Dobson said he hadn’t heard of any major complaints.

‘‘Academic studies show that the costs go up by a negligible amount, less than 2 percent,” he said. ‘‘That’s less than the rate of inflation.”

Progressive Maryland has worked on the issue since the late 1990s when it was called Progressive Montgomery, Dobson said. The organization helped it win approval for county contracts in Montgomery and Prince George’s, he said.

Bill to hike tax filing fees dies

Susan R. Lee, owner of a small Columbia dental laboratory and a law student at the University of Maryland, said she was relieved to hear that a proposal to increase businesses’ annual report filing fees died.

The legislation would have raised that fee for all companies — from the largest ones such as Bethesda defense and aerospace giant Lockheed Martin Corp. to tiny limited liability companies — from $300 to $1,000. The filing fee increased from $100 to $300 for most businesses in 2003.

Another version will likely be reintroduced in a future session, Lee said. ‘‘It’s just too tempting a revenue target,” she said.

The bill would have added about $104 million to state funds next fiscal year and roughly a $75 million annual boost in the succeeding four fiscal years, according to a report by the state Department of Legislative Services.

The proposal was also opposed by the Montgomery County Chamber of Commerce. Its chairman, Lester Coffey, said that more than tripling the fee was a significant burden for companies, particularly small ones.

‘‘It could also be huge for large businesses if they have a lot of subsidiaries,” said Coffey, president of Coffey Communications LLC, a Bethesda professional services consulting company.

The Montgomery and Maryland chambers also successfully lobbied against a proposal to expand the sales tax to many service businesses. Those would have included accountants, professional consultants, Realtors, barbers, employment agencies and escort services.

‘‘It would have opened the floodgates,” Coffey said. ‘‘Once you get that kind of tax in place, it’s hard to remove it or get it to go down.”

The bill would have resulted in about $313 million more in general fund revenues next fiscal year, which would more than double to $761 million in 2012, according to a Department of Legislative Services report. Had the measure passed, many service businesses likely would have moved to adjacent states without such a tax, Snyder said.

Coffey and Snyder said their chambers supported other measures to raise revenue to deal with the structural deficit, such as increasing the gasoline tax. The Maryland chamber also wanted to see slot machines at limited sites such as horse racetracks, a bill that did not pass.

The Maryland chamber also opposed defeated bills such as one to establish a state universal health care plan funded through Medicaid payments, and a comparative fault bill that would have allowed people to win jury awards even if they partly contributed to the injury.

Chambers’ bills find success

The Maryland chamber also advocated for a measure to amend the state’s eminent domain law to give small-business owners and other property owners more compensation when a government agency or another entity takes their land for a project deemed in the public interest.

The bill, to take effect in July, will increase compensation caps that the property owners can receive, including from $10,000 to $60,000 for businesses.

Some ‘‘small steps” were taken to improve access to health care, especially for employees at small companies, Snyder said. One bill authorizes discounts for small employers that participate in wellness programs, while another will allow for greater flexibility to health insurance carriers in the types of products they offer.

The Montgomery and Maryland chambers supported another approved bill to extend the state’s small-business reserve program until 2010. The law requires 22 state agencies to award at least 10 percent of the value of state contracts to small companies.

About 6.2 percent of the contract dollars in fiscal 2006, or $96.1 million, went to small businesses, according to the program’s most recent report by the Governor’s Office of Minority Affairs. Nine of the 22 agencies made the 10 percent goal, led by the Department of Environment with 19 percent. Some agencies were under 2 percent.

Officials are taking steps to increase those numbers, such as ensuring contracts under $200,000 are included in the program, the state report says.

Smoking ban, clean cars OK’d

Besides the living wage bill, chamber officials opposed the tougher vehicle emissions bill that O’Malley plans to sign later this month.

The law requires the state to adopt regulations by Dec. 31 to establish stricter clean-air standards for motor vehicles starting with 2011 models along the lines of California’s emission program.

Maryland would be better suited by continuing to follow the federal program, which is more targeted for the state than one for California, Snyder said. Some Northeastern states such as New Jersey and Pennsylvania have adopted similar standards.

Both the Washington Area New Automobile Dealers Association and Maryland Automobile Dealers Association lobbied against the measure, while others such as Environment Maryland supported it. The groups disagreed over how much it would raise manufacturing costs, while advocates said reduced fuel costs would more than offset higher vehicle purchase prices.

The Restaurant Association of Maryland opposed a proposal that would impose a statewide ban on smoking in bars and restaurants, as well as some private clubs such as American Legion and Veterans of Foreign Wars halls, starting next February. Several Maryland counties, including Montgomery and Prince George’s, already have such a ban, as do 18 states and Washington, D.C.

Establishments will be allowed to apply for hardship waivers under a compromise.

Pent-up priorities for labor

Labor groups had a ‘‘sort of pent-up list” of priorities after the door was slammed the past four years under a Republican governor, said Sue Esty, interim executive director of American Federation of State, County and Municipal Employees Council 92, which represents about 35,000 state employees.

‘‘There’s a new tone in Annapolis, where working people’s issues are being taken seriously again,” Esty said. ‘‘And I think that bodes well for the whole term.”

Of roughly 100 bills that AFSCME supported, about 10 significant bills are headed for O’Malley’s desk, she said.

State employees received a 2 percent wage increase, which was less than they would have liked, ‘‘but at least they didn’t get blown off the map with the approaching structural deficit,” Esty said.

The session did not bring unions all the changes they want, but it did put union issues on the right path for the new term, said Mason of the AFL-CIO.

‘‘I certainly didn’t expect this revolution or this massive change in the 90-day session,” he said.

One bill that was specific to unions, the so-called fair share bill, died in committee in both chambers this year. The bill, which would have authorized unions to collect dues from non-union employees who benefit from union wage negotiations, was part of O’Malley’s legislative package.

The session saw ‘‘a new governor, new legislators being confronted with an old culture,” Mason said. ‘‘We believe this is a great moment in Maryland’s history because we know a lot of the legislators ran as progressives,” he said.

The fair share issue is not going to go away, said Esty, who added that she expects the bill to pass before the end of O’Malley’s term.

Fate of state’s business-related bills

Supported by state Chamber of Commerce that passed:

SB 3: Starting July 1, the compensation for business owners and others when their property is taken in an eminent domain action will increase. For businesses, the cap that property owners will receive will be raised from $10,000 to $60,000.

SB 194⁄HB 208: Starting Jan. 1, businesses must follow standards to formally notify consumers if there is a security breach of personal data that can result in identity theft.

HB 339: Starting July 1, medical insurers can offer up to a 20 percent discount for small businesses that participate in wellness programs.

Supported by Maryland chamber that failed:

SB 182: Would have repealed some estate tax provisions, such as one related to deductions for state taxes allowed under the federal estate tax.

SB 950: Would have authorized up to 15,500 slot machines at limited sites such as horse racetracks to help pay for schools.

Opposed by Maryland chamber that passed:

SB 103⁄HB 301: Will adopt regulations by Dec. 31 to establish stricter clean-air standards for motor vehicles starting with 2011 models along the lines of California’s emission program.

HB 430: Establishes a minimum ‘‘living wage” for most employees working on state service contracts of more than $100,000 at $11.30 per hour in Baltimore City and Montgomery, Prince George’s, Howard, Baltimore and Anne Arundel counties, and $8.50 per hour in the rest of Maryland. Applies only to contracts awarded after Oct. 1.

Opposed by Maryland chamber that failed:

HB 400: Would have established a state universal health care plan for all Maryland residents and non-residents working in Maryland, funded through Medicaid payments.

HB 448: Would have expanded the sales tax to a wide range of services, including cable television, vehicle repairs, employment agencies and business consulting.

HB 1053: Would have increased the fees for most businesses to file their annual reports in Maryland from $300 to $1,000.

Sources: Maryland Chamber of Commerce, Maryland General Assembly