The Maryland Chamber’s Legislative Committee voted this afternoon to support an amended version of the unemployment insurance bill (SB 107). The committee took action after reviewing a draft of the amended bill and meeting with Senate Finance Committee Chairman Thomas McLain (Mac) Middleton (D-Dist. 28) and Senate Minority Leader Alan H. Kittleman (R-Dist. 9), a member of the Finance Committee.
“We thank the Finance Committee, the Unemployment Insurance Oversight Committee and representatives from the administration for working to address our concerns,” Maryland Chamber President/CEO Kathy Snyder, CCE said. “Our goals have been to give employers payment plan options, offset the cost of any unemployment insurance system changes and ensure the long-term health and stability of the unemployment insurance trust fund. This bill accomplishes those goals.”
Senator Middleton said the Finance Committee could vote on the amended bill as early as Tuesday afternoon, March 2.
The bill was amended to address a number of the Maryland Chamber’s concerns:
Payment Plans & Reduced Interest Rate: Since its introduction the Maryland Chamber has strongly supported the provision to provide payment plans and reduced interest rates. The payment plans will help Maryland employers spread the cost of increased unemployment insurance taxes over the course of the year. Unemployment insurance taxes are calculated based on the first $8,500 of taxable wages. Without this option, the weight of the unemployment insurance tax increase will hit many businesses especially hard at the end of the first quarter.
Long-Term Cost: As introduced, the bill would adopt a number of changes to the unemployment insurance system to make the state eligible for $126.8 million of federal stimulus funds. The changes would result in approximately $18.4 million to $19.4 million of additional benefits per year. The amended bill includes an estimated $18.2 million to $19.5 million in annual benefit reductions to offset the cost of the increases.
Stability of the UI Trust Fund: The amended bill also keeps the rate schedule at table F, rather than moving to table E. The original bill used much of the federal stimulus funds to provide employers with a small one-year rate deferral. While deferring a small portion of the unemployment insurance tax increase may sound appealing, the Chamber believes it would weaken the unemployment insurance system and cause Maryland employers to pay higher rates for a longer period of time. Staying at Table F and dedicating the federal dollars to the trust fund will help rebuild the trust fund faster, which is an important step to reducing unemployment insurance tax rates for all Maryland employers.
