Ehrlich says he'd review rules, mandates frustrating small businesses

By John Wagner
Washington Post Staff Writer
Tuesday, June 8, 2010

Former Maryland governor Robert L. Ehrlich Jr. (R) pledged Monday that small businesses would once again come to see state regulators as "their partners, not their sheriffs" if he returns to office next year.

Ehrlich promised the "fundamental shift in attitude" as he stood in a Gaithersburg pizzeria that served as a backdrop for his first policy proposals since launching his bid to win his job back from Gov. Martin O'Malley (D) two months ago.

As part of an "Entrepreneur Agenda," Ehrlich said that he would set up task forces to review business regulations and health-care mandates and that he would make several changes to the unemployment insurance system, including a possible repeal of benefits for part-time employees, championed by O'Malley.

Ehrlich also repeated a pledge from his announcement speech to roll back an O'Malley-backed increase in the sales tax and said he would appoint another task force to look at lowering the corporate income-tax rate, with an eye toward being more competitive with Virginia.

"We have small-business people in the cross hairs of state government," Ehrlich said. "Small-business people have been crying out for leadership."

An O'Malley spokesman immediately dismissed Ehrlich's plan as "all talk and no action."

"He is proposing a commission, a summit, a task force, three reviews and two explorations, but nothing to actually create jobs or help small businesses struggling because of the global recession," said Rick Abbruzzese, O'Malley's deputy campaign manager. "This lip service is insulting, because Maryland's small businesses and families expect and deserve more from a former governor."

O'Malley also has made small business issues a focus in recent months, including lobbying the legislature to pass a tax credit for employers who hire workers off the unemployment rolls.

Monday's back and forth underscored the importance of jobs and the economy as key issues in the 2010 governor's race. In a Washington Post poll released last month, 85 percent of registered voters said the state's economy would be either extremely or very important in determining how they vote for governor.

Ehrlich said his proposals grew out of a series of visits to small businesses across Maryland and include some new ideas as well as some practices that worked during his term, which ended after his 2006 defeat by O'Malley.

Among the new initiatives: quarterly roundtables, at which Ehrlich and legislators could hear directly from small-business owners about their interaction with state government. Ehrlich said he wished he had engaged legislators in a similar fashion during his term, saying many lawmakers lack an understanding of running a business.

Ehrlich acknowledged that some of his plans -- including rolling back the sales tax from 6 percent to 5 percent -- would require "heavy lifting" to win approval from a legislature that will almost certainly still be dominated by Democrats after the November election.

But Ehrlich said other parts of his plan can be accomplished through executive action. He promised that a "Small Business Bill of Rights" would be developed to ensure that agencies are "fair, timely and predictable in their disposition of small-business matters."

Ehrlich said he also would offer commissions to state business recruiters based on the companies they attract. He said he would appoint "expediters" in key departments to help businesses and create a "knowledge desk" to help small businesses.

Among the more controversial Ehrlich proposals are changes to the unemployment insurance system. Many companies saw a threefold jump in what they must pay this year. The increases are largely the result of a recession-sensitive formula signed into law in 2005 by Ehrlich -- a fact he has glossed over while discussing the issue with business owners.

Ehrlich said Monday that he is open to convening another commission to look at the formulas.

In the meantime, he wants to require that lower-court appeals of workers' benefit eligibility be completed within 30 days. Employers report having to wait four to six months for a judgment on appeals, during which time they are paying taxes on disputed cases, Ehrlich said.

Ehrlich said he also would "explore" repealing an O'Malley initiative that made part-time workers eligible for unemployment benefits. Ehrlich said that decision, approved by the legislature, has "dramatically increased [unemployment] payments." O'Malley administration officials said the impact has been modest.

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