Gov. Martin O'Malley's proposed changes to unemployment benefits have at last won the support of key business groups.
The Maryland Chamber of Commerce just released a statement saying its legislative policy committee had voted this afternoon to back a heavily amended version of the Democratic governor's plan. The amendments resulted from lengthy negotiations among lawmakers, the administration, business groups and labor and were largely designed to appease groups, such as the Maryland Chamber, that had been concerned about long-term costs to employers.
Until today, the Maryland Chamber of Commerce and other business groups had opposed the legislation. Now, the Maryland Retailers, Associated Builders and Contractors and Maryland restaurateurs back the bill, though the National Federation of Independent Businesses continues to oppose it because it doesn't provide any tax relief.
Chamber President Kathy Snyder said in a statement:
"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."
With additional support now secured, the Senate Finance Committee will likely vote on the proposal tomorrow. The House of Delegates will then take up the amended bill.
Sen. Thomas M. Middleton, a Democrat and chairman of the committee, said he was "very pleased" with the outcome. "After all of the compromise that took place, I felt very optimistic," Middleton said. He led the weeks-long negotiations.
Middleton said he and the O'Malley administration are now working on a plan to help small businesses by developing loan guarantees for employers who will be hard hit by this year's dramatic increase in unemployment-insurance taxes.
If lawmakers pass the amended plan, which broadens the number of people eligible for unemployment benefits by shifting the time period that can be considered when calculating them, the state will be eligible for about $127 million in federal money.
That cash will be deposited into the state's unemployment insurance trust fund, which has been depleted by the high number of people collecting and businesses that have gone under. The governor originally wanted to use that money to provide tax relief to employers, but the Maryland Chamber of Commerce and other groups wanted to keep the money in the trust to build it back up.
To offset the long-term costs -- about $20 million per year -- associated with accessing the federal money, other benefits will be nipped. Among them: eliminating sick claims, increasing the minimum weekly claim to $50 (which knocks off a few of the lowest end claimants), increasing the penalties for misconduct and decreasing the amount of money an unemployed person can make while collecting benefits.
The Sun editorial board weighs in here.