Maryland Chamber Blog

Remembering Joseph B. Harlan

2008-11-17T21:07:20Z

The State of Maryland and the Maryland Chamber lost a leader last week with the passing of Joseph B. Harlan. Harlan was a prominent Baltimore attorney and active member of the Maryland Chamber of Commerce.

He Chaired the Chamber’s Workers’ Compensation Committee, playing a major role in the passage of the Workers’ Compensation Reform Laws of 1986 and 1987.

Harlan began his career as a prosecutor, before he went into private practice with the firm of Swerdloff, Rabineau & Murphy, and later in the firm Klein & Harlan. In the 1990s, he began a startup health care company. In 2001, he joined the law firm DLA Piper.

Read his obituary in today’s Baltimore Sun here.

The Maryland Chamber sends its condolences to Mr. Harlan’s family.

MD Business Tax Reform Commission to Hold First Meeting

2008-11-14T17:01:54Z

The Maryland Business Tax Reform Commission has now been appointed and will hold its first meeting Wednesday, November 19, at 3:30 p.m. in Annapolis. Karen Syrylo, CPA, the Chamber’s State Taxation Consultant, will represent the Maryland Chamber on the Commission.

The Commission was established during the 2007 special session to review and evaluate the state’s current business tax structure and make recommendations for changes. Policies to be studied include mandatory unitary combined reporting, gross receipts taxes, value added taxes, alternative minimum taxes, and more.

We will be covering all Commission hearings and keeping you updated on this blog.

Governor Addresses Maryland Chamber

2008-11-13T19:07:12Z

Governor Martin O’Malley thanked the Maryland Chamber for its support of the successful slots referendum and discussed Maryland’s economic future during the Chamber’s recent Business Policy Conference in Cambridge.

“I want to say something that perhaps has not often been heard from Democratic Governors at the Chamber of Commerce, thank you for your partnership and especially for your support on the passage of Question 2. It wouldn’t have happened without you,” O’Malley said.

With the referendum behind us, the Governor turned his attention to the national economic downturn. He discussed Maryland’s economy and his Administration’s priorities.

As the country comes out of the current economic downturn, O’Malley said he has faith that Maryland will rebound faster than other states. He pointed to the state’s strength in biotech and life sciences and the fact that Maryland is one of seven states with a Triple A bond rating and one of nine states with positive job growth.

He also discussed the 40,000 to 60,000 jobs coming to Maryland as a result of Base Realignment and Closure (BRAC). “We would like more dollars to do more road improvements, and more traffic and intersection redesigns more quickly; but we are focused on the jobs that are coming,” he said.

Read the Governor’s complete remarks here (pdf).

Photo by John Drew, Professional Image Photography, the Maryland Chamber’s Official Photographer.

Here is a video of the Governor’s remarks. We apologize for the poor audio quality.

Transportation Funding Challenges Discussed by Business Policy Conference Panel

2008-11-13T19:06:51Z

The affect of the economic downturn on already strained federal and state transportation funds and the outlook for transportation funding were the topics of discussion at the “Transportation Funding Challenges” panel at the Maryland Chamber of Commerce’s 2008 Business Policy Conference.

Jock Menzies, Chairman of the Terminal Corporation and Chair of the Chamber’s Transportation Coalition, moderated the discussion. The panel included Beverley Swaim-Staley, Deputy Secretary of the Maryland Department of Transportation; Lon Anderson, Director of Public and Government Relations for AAA Mid-Atlantic; and Anne Ferro, President and CEO of the Maryland Motor Truck Association, Inc. Swaim-Staley addressed recent cuts to Maryland’s Six-Year Capital Progam—a deferral of $1.1 billion over six years.

“For the first round of reductions we were forced to reduce a lot of the new projects that we had put in the program,” she said. “Unfortunately now because of the economic news we have actually had to reduce some of the projects that we had the good fortune to add last year.”

Swaim-Staley said that despite the cuts, the Department of Transportation was able to save system preservation programs, and though more reductions loom on the horizon, she is hopeful the programs will stay intact.

Anderson said that though the system preservation program is in place, he expects cuts will be seen as budgets shrink.

“I know that Maryland remains committed to highway safety and I know they have the preservation program in place—but let’s be honest, transportation is very expensive and saving transportation is even more expensive” he said. “In tough times maintenance gets deferred.”

Budget reductions are a result of several factors including the depletion of the Federal Transportation Trust Fund and the stagnation of the gas tax rate Swaim-Staley said.

“There was traditionally a gas tax increase about every four to five years for many, many decades. That used to be a funding source you could count on. Many projects would be put in the pipeline about six to ten years ahead of time and there would be funding for those projects to go from planning to design to construction,” she said. “Unfortunately the last gas tax increase was in 1992 and we have not had a gas tax increase since then.”

Anderson said while a raise in the gas tax, the revenue from which is applied to transportation funding, is needed, accountability for what transportation funding is used for is just as important. “The transportation funds are raided so regularly in many states, Maryland included, I just call it the state transportation ‘cookie jar.’ That’s a problem,” he said. “[AAA] has supported higher gas taxes but first we want the trust fund better protected.”

Ferro said the trucking industry, which produces 40 percent of Maryland’s transportation funding, is also a major factor in what is happening in Maryland’s economy and transportation funding.

“By virtue of the slowdown and the slackening in the trucking industry we’ve hurt the Transportation Trust Fund,” she said. “Fuel tax revenue are down because of trucking, toll revenue are down significantly, and we are also hurting the title tax—people are not buying trucks of any size these days.”

She added that the economic downturn and high cost of gas prices have caused several truck drivers to seek other employment or raise their rates for transport, which is reflected in the cost of goods.

“We’re small business owners predominately and it’s a straight cash flow issue. I’m going to fill a 200-gallon tank today to transport a load that I might not get paid for 30 to 45 days,” she said. “I think it’s a significant hit and I think everybody sees it in the prices that you pay for things.”

The panel said that while all the factors combine to create the current challenges for transportation funding, they each have separate solutions, which will then affect transportation funding in a different way. The panel added that though the present outlook seems grim, they are hopeful for actions to be taken by the new White House administration and new investments in infrastructure.

“We hope a new administration in the White House might mean a new commitment to and a redefinition of the important role that the federal government should play in transportation funding,” Anderson said. “We think the federal government should not only continue to be a major funding source for transportation, but more importantly, the federal government can provide dynamic leadership that can guide the states in better ways to manage their finances, rather than being the leading example in how to bankrupt the federal highway trust fund. “

Legislative Leaders Preview 2009 Session

2008-11-13T19:00:10Z

The Maryland General Assembly’s Democratic and Republican leaders discussed the upcoming legislative session during the Maryland Chamber’s Business Policy Conference last week. The leaders all expect the state’s budget deficit to dominate the session.

The 2010 budget is going to be a big challenge,” House Speaker Michael Busch (D-Dist. 30) said. “We are going to have to make the tough decisions on where to cut to make up $1 billion. I do not see any appetite in Annapolis for new taxes.”

House Minority Leader Tony O’Donnell (R-Dist. 29C) said the state has to do a better job controlling spending. “If we continue to spend at a level that is unsustainable, higher education will be jeopardized, health care will be jeopardized, the environment will be jeopardized, transportation funding will be jeopardized,” he said.

Other topics the lawmakers discussed included the re-emergence of legislation the Maryland Chamber has fought to defeat in the past, including last year’s green house gas bill, combined reporting legislation, and universal health care funded by a payroll tax on employers. With the prospect of rolling brownouts and blackouts by 2011, the legislative leaders also discussed Maryland’s looming energy crisis. They encouraged business people to stay informed and ensure their lawmakers know where they stand on important issues.

“This is where you as a chamber have to be on the alert,” Senate President Thomas V. Mike Miller said. “The trend in the economy being what it is, you’ve got to be very watchful, very involved, because there are going to be some very tough issues that are not going to be, in my opinion, conducive to your best interests and conducive to the best interest of the state. “

On the Green House Gas Bill
Senate Minority Leader Allan Kittleman (R-Dist. 9) said, “It was pro-labor and pro-business folks coming together to defeat that bill last year. It was amazing to have the steelworkers and management come together on an issue like that. ”

Busch said, “The question is what’s in the specific legislation. I think it’s important for your government affairs people to make sure that you know, within the legislation, what you can live with and what you can’t live with. Where are there areas to compromise?”

On Universal Health Care Funded by a Payroll Tax
Miller said, “There is going to be a move for a payroll tax to help pay for universal health care coverage. To me, it’s pie in the sky, it’s utopian. I don’t think it’s going to happen. Universal health care coverage is a good idea, but we certainly can’t afford it.”

Kittleman said, “We are taking on more spending in Maryland. While there may be good intentions behind some of the spending initiatives, we just don’t have the money. Health care is a big issue in that regard. We’ve got to find ways to reduce the cost of health care, not increase state spending.”

On Maryland’s Looming Energy Crisis
O’Donnell said, “2011 is looming. We have energy transmission problems and we have generation problems. One of the things we can do, although it won’t solve the problem immediately, is to produce generation that does not produce green house gas emissions. That includes nuclear. We very strongly need the third unit at Calvert Cliffs. It’s something this state needs desperately.”

Panel Discusses the Future of Employment Law at Business Policy Conference

2008-11-12T19:56:50Z

A panel of experts discussed changes to employment laws and regulations expected in 2009 and beyond at the Maryland Chamber of Commerce’s 2008 Business Policy Conference. Attributing the revisions to several factors, including the economy, the rising unemployment rate, the transition to a new Congress, and entrance of the Obama administration, the panel referred to the changes to come as “seismic.”

The panel was moderated by Elizabeth Torphy-Donzella, Partner with Shaw & Rosenthal, LLP and included Ron Adler, Chairman of the Maryland Chamber’s Unemployment Insurance Subcommittee and President of Laurdan Associates Inc.; Mike Levin, Chair of the Maryland Chamber’s Workers Compensation Subcommittee and Managing Partner of Dirska & Levin; and Darrell VanDeusen, Partner with Kollman & Saucier, P.A.

Adler said businesspeople should be concerned about the reintroduction of two bills defeated last session. The first bill deals with the definition of part-time workers. The second would address maximum weekly benefit amounts.

Listen to Adler’s take on the outlook for employment law in the 2009 General Assembly Session.

Levin said that despite negative forecasts for other aspects of employment law, the outlook for workers compensation is positive. He said that with a rate reduction just approved in Maryland and the continued stability of companies insuring Maryland’s businesses, the state’s ranking among programs across the nation is rising in terms of quality of service. He also said that Maryland businesses have made great strides toward preventing more accidents, which has benefited the insurance industry.

Listen to Levin’s overview of the current state of the insurance industry in Maryland and the outlook for its future.

Van Deusen spoke about changes that occurred last session and changes expected in the 2009 General Assembly as well as changes on the federal level in regard to employment law. He spoke about actions taken last year and changes expected this year to legislation including Maryland’s Flexible Leave Act (H.B. 40/S.B. 344), the Americans with Disabilities Amendments Act of 2008 (H.R. 3195/S. 1881), the Patriot Employers Act (S. 1945), the Lily Ledbetter Fair Pay Act (H.R. 579/S. 1843), the Healthy Families Act (H.R. 1902/S. 1085), and others.

Listen to VanDeusen discuss what happened in the last Maryland General Assembly Session and the future of legislation passed.

Listen to VanDeusen’s overview of what happened in the last legislative session and what to expect on the federal level this year.

Maryland Politics: What Just Happened And What Lies Ahead?

2008-11-11T17:16:52Z

During last week’s Business Policy Conference, just three days after the Nov. 4 election, Blair Lee addressed the topic, “Maryland Politics: What Just Happened and What Lies Ahead.” If you’re interested in what sorts of insights can be drawn from last week’s election results, listen to his presentation below.

Lee is CEO of the Lee Development Group, political columnist for the Gazette and political commentator for WBAL radio. Click below to listen to his presentation.

Presentations from the 2008 Business Policy Conference

2008-11-10T20:28:36Z

Many attendees requested that we make the presentations from last week’s Business Policy Conference available online. Here are pdfs of the speaker presentations:

Jim Perdue: Chickens, Economy and the Environment

Jim Perdue: Balance in the Bay: Chickens, Economy and the Environment

Green’s Not Extreme

Health Care Reform: Expectations in 2009

Patricia M.C. Brown: Value-Based Design Strategies Hopkins’ Experience with the Journey to Value-Based Design

Economic Outlook - The Federal Reserve Bank’s Perspective

Uncertainty in the Financial System

Over the next couple days, we’ll be posting more information from the conference, including write-ups, audio and video content from the presentations.

Maryland Voters Approve Slots Referendum

2008-11-05T13:19:14Z

Maryland voters approved Question 2 yesterday, authorizing 15,000 slot machines at five locations around the state.

“Maryland voters understood that this is a reasonable alternative to the budget cuts or tax increases that would otherwise be needed to stabilize Maryland’s shaky finances,” Maryland Chamber President & CEO Kathleen T. Snyder, CCE said.

Since 2002, the Maryland Chamber has advocated carefully regulated slot machines in limited locations to fund public education. Marylanders are spending millions of dollars each year on this form of entertainment outside the State. The Maryland Chamber believes that we should keep this money at home to help fund public education.

More:

Misleading Corporate Tax Data - Round 4

2008-11-04T17:26:55Z

For the fourth time in recent years, State Senator Paul Pinsky has requested and received data from the State Comptroller’s Office regarding corporate income tax payments. As with each of the prior discredited reports, no meaningful conclusions can be drawn from the data.

The cover letter to the report from the Comptroller’s Office acknowledges that they are unable to match related corporate entities from their data system, and therefore “this information does not provide a full picture of the corporate income taxes paid by many “businesses” as commonly perceived.” Many large businesses operate through multiple corporate entities, only one of which may be responsible for tax payments.
The Comptroller’s cover letter also notes that there are several legitimate reasons for a business paying no corporate income tax in a given year, including: (1) Having no profits; (2) Using carry-forward or carry-back losses; and (3) Using state income tax credits. Unfortunately, the report provides no analysis of the reasons certain businesses reported no tax liability.
The report provides “preliminary” data for the 2006 tax year, even though the returns for some corporations were not yet due when the report was compiled. Similar preliminary data from prior year reports has consistently understated the amount of income taxes paid by businesses.
Corporate tax payments have significantly increased in the past five years, coupled with a tax increase effective in tax year 2008 that put Maryland in the top one-third of states nationwide in corporate income tax rates. Businesses also paid nearly one-half of the $1.3 billion Maryland tax increase enacted during the past year.
Maryland businesses are providing extensive tax information to the State Comptroller’s Office to be reviewed by the Maryland Business Tax Reform Commission. A full analysis of that data will provide much more meaningful information than the incomplete data shown in the report to Senator Pinsky.

Senator Pinsky has also written to the 50 largest corporations in Maryland asking that they disclose to him their 2006 corporate tax payment amounts. We find such a letter from a state legislator highly inappropriate. The Maryland Chamber believes that individual businesses should not be coerced into publicly disclosing information that is confidential under state and federal law.

For more information, contact Ron Wineholt at rwineholt@mdchamber.org.

Related Documents

2008 Business Philanthropy Award Winners

2008-11-04T16:06:26Z

The Maryland Chamber of Commerce and Baltimore Business Journal awarded the Maryland Business Philanthropy Awards yesterday during the annual Association of Fundraising Professionals (AFP) - Maryland Chapter Philanthropy Day Luncheon in Baltimore.

“The purpose of the Business Philanthropy Awards is to recognize the extraordinary businesses that are contributing and incredible amount of employee time and charitable contributions to their communities,” said Maryland Chamber Chairman Betty Buck, President of Buck Distributing Company, Inc.

Congratulations to year’s winners:

Small Employer Winner (1-100 employees)
Howard Bank: Community involvement is one of Howard Bank’s core values. Every executive is required to serve on the board of a local charity or non-profit agency. Though only four years old, Howard Bank has provided bank resources and monetary support to more than 50 organizations. Bank employees have provided countless volunteer hours to many organizations, including Big Brothers and Big Sisters, The Arc of Howard County, Cystic Fibrosis of Central Maryland, Girl Scouts of America and more. It has also developed or participated in a variety of financial literacy programs and other educational programs for people of all ages.

Medium Employer Winner (101-500 employees)
Battelle: Nominated by the United Way of Central Maryland, Battelle distributes at least one fifth of its net operating income each year to civic, arts, health and human services, and educational needs. About two-thirds of its philanthropic dollars go to educational projects, from early childhood education to college, especially in the science technology, engineering and math areas. Battelle’s commitment to the environment is demonstrated through Team Battelle programs like the Godman Guild and the Rivers and Strreams Beautification Team that are committed to recycling and reducing waste. Hundreds of Battelle employees volunteer their time to non-profit organizations and participate as peer mentors, science fair judges, and advisory panel members.

Large Employer Winner (501+ employees)
Erickson Retirement Communities: Erickson increased its corporate giving in 2008 by 65 percent over last year. Its targeted charitable contributions will reach $2 million this year, one half of which is donated to Maryland-based nonprofits. In addition, Erickson provides each corporate employee with up to four hours per month to volunteer their time to charitable organizations during work hours. It provides an annual $100,000 grant to Johns Hopkins University School of Medicine to support a fellowship in geriatric medicine, and it recently launched partnerships with the United Negro College Fund and Gloucester Institute to create college scholarships in support of minority students interested in careers in health services, public policy or management in the field of aging.

Vote on November 4

2008-11-03T19:28:08Z

November 4 is Election Day. Be sure you vote.

The Maryland Chamber also believes it’s important that Maryland businesses encourage their employees to get to the polls. It’s not too late. Send a company wide email this afternoon encouraging them to vote. Consider offering them extra time in the morning, at lunch or at the end of the day to ensure they have time to vote. Pass along this link where they can look up their polling place and access a sample ballot.

Who's Taking Care of Your Customers?

2008-10-31T12:47:59Z

Customer loyalty can be a powerful competitive advantage. Loyal customers are repeat buyers. They help spread the word about your business. They are willing to pay more for your product or service, and they are more forgiving when you make mistakes.

Explore customer service and customer loyalty topics with our expert panel during the Business Development Council’s next small business program on December 9, from 8 a.m. to 10 a.m., at the Maryland Chamber office in Annapolis. Attendees will learn more about:

How to keep your internal and external customers happy.
What is emotional labor?
Characteristics of consumer trust and loyalty.
Current best practices and training.

Speakers include David Libdan, President of Applied Resource and Knowledge; Tom Saquella, President of Maryland Retailers Association; and Angie Barnett, President of Better Business Bureau of Greater Maryland.

Registration is $20 per person. You can also participate in the event via conference call for $10. Register online here, or contact Gail Lemke at (410) 269-0642, (301) 261-2858 or glemke@mdchamber.org. The program is being sponsored by Verizon Wireless.

Maryland Chamber Launches Green Business Blog

2008-10-30T21:31:11Z

The Maryland Chamber launched a new blog this week dedicated to discussing environmentally friendly business practices, environmental legislation affecting Maryland businesses, and tips on how to “go green.”

Earlier this year, we surveyed our members about their energy and environmental conservation efforts. The result was an impressive and creative list of green practices and initiatives being undertaken by member companies.

We will use the new Green Business Blog to take a closer look at these initiatives, talk to the people who put the practices in place, and learn about the advantages and challenges associated with them. We’ll also ask experts within our membership for tips and best practices that can help you make your workplace more environmentally conscious.

The blog will be frequently updated with news, photos, podcasts, and video updates. Visit the Green Business Blog here . We encourage you to join the discussion, suggest improvements, and share your stories with us. Tell us about the green initiatives at your company by emailing Krysten Appelbaum at kappelbaum@mdchamber.org.

Maryland's Unemployment Insurance Tax Increases Jan. 1

2008-10-30T13:06:54Z

On January 1, 2009 the unemployment insurance tax will increase from the minimum rate of 0.3 percent on the first $8,500 earned by an employee to a minimum of 0.6 percent. This tax increase is expected to result in an increased payment by companies from the current $25.50 per worker to $51 per worker. The Department of Labor, Licensing and Regulation (DLLR) is beginning to notify employers of the tax hike.

The tax increase is another consequence of the current depressed economic climate. The unemployment insurance tax is the economic resource for the state’s Unemployment Insurance Trust Fund. In recent months the weekly payout of unemployment insurance benefits from the trust fund has increased from $7 million to $12 million. This increased payout of benefits is a result of Maryland’s increased unemployment rate of 4.6 percent, which in turn is now beginning to deplete the trust fund.

State law requires DLLR to review the Unemployment Insurance Trust Fund each September 30. The unemployment insurance tax automatically increases if the balance of the fund falls below a certain level. The fund balance now stands at an estimated at $895.3 million, which is $40 million below the threshold to keep it at its current level.

Thomas Perez, Secretary of DLLR expressed that is necessary to keep the trust fund balance at a healthy level in order to ensure that Maryland does not find itself in a position of insolvency similar to other states, such as California, Ohio, and Michigan. For more information, contact Allyson Black at ablack@mdchamber.org.