The Maryland Senate recently passed legislation that would allow the State to unfairly use low cost prison labor to compete against for profit businesses for service jobs.

Under current law, Maryland Correctional Enterprises (MCE) may not (with limited exceptions) sell goods or services on the open market. MCE currently offers data entry, printing, furniture restoration, mailing and distribution, AutoCAD design and transportation and moving services. SB 145 would allow MCE to expand into any additional service and offer it in the marketplace.

Maryland Chamber Vice President of Government Affairs Ron Wineholt testified in opposition to the legislation during a hearing today in the House Health and Government Operations Committee.

While the chamber recognizes the State’s interest in providing meaningful job training for incarcerated individuals, MCE is not bound by the labor laws imposed by the General Assembly on all private employers, including minimum wage rates, fringe benefits, overtime, leave, and of course taxes.

According to the bill’s fiscal note, MCE estimates that the bill would enable them to make an additional $1 million in sales in fiscal year 2009. This would come at the expense of sales that would otherwise be made by private sector companies with the taxes that would have been paid on those sales, wages and facilities.

The Chamber believes this bill is far too broad and open ended. At a time when businesses face a slumping economy and higher taxes, they must now face the prospect of unfair competition from Maryland Correctional Enterprises.