The way Maryland businesses see it, the 1983 session of the Maryland General Assembly that opened last week will be three months of scrambling to avoid losses with little hope for substantive gains.
Gov. Harry Hughes is proposing to increase taxes on cigarettes and alcoholic beverages at the wholesale level. The unions, coming to the legislature with more supporters than ever, are lobbying to push down interest rate ceilings and to establish an "unemployed bill of rights" that would force utility companies and mortgagors to hold off on collections. A proposal is circulating for an elective public service commission. And there appears to be strong sentiment for increasing the amount employers must pay into the state's hard-pressed unemployment insurance fund.
"We always get a bunch of bills down there that are noisome and troublesome so it'll be mostly a defensive action," said insurance lobbyist William F. Gately.
"There will be no blockbusters," said business lobbyist Leo Doyle. "This is a year to hold the line and try to educate the people down here most notably, the 66 new delegates and senators joining the 188-member legislature as to our priorities."
There will be some measures that, if passed, would be viewed as gains for business: the legislative leadership, prodded by House Speaker Benjamin L. Carlin, set up a Jobs Initiative Task Force that has come up with a series of proposals designed to help businesses stay afloat and create new jobs. Foremost among those proposals is one that would set up a new venture capital fund to make loans to small business.
Despite the tough climate--caused by a new legislature meeting for its first session, a $133 million projected state deficit next year and the generally poor state economy--some industries will push for legislative gains.
Most notable will be the banking industry, which was possibly the biggest winner during last year's 90-day session. Now, however, they want more. Last year, the Assembly voted to raise interest rate ceilings to 24 percent. This year, the banks are proposing a new law that would provide for total deregulation. It would permit the banks for the first time to charge interest on unpaid interest charges and to accept property as collateral for revolving consumer loans.
The banks--along with credit card corporations--are also asking to be allowed to charge fees on credit cards, as is permitted now just across the state border in Delaware. The banks have made these demands every year lately, but this year they're taking an approach tailored to the times by labeling the effort a "jobs measure."
"The idea of interest rate deregulation might help keep jobs in Maryland and bring jobs to Maryland," said Franklin Goldstein, a lobbyist repesenting Citicorp.
The labor unions, on the other hand, intend to push for legislation retracting the increase in the interest ceiling.
According to the Maryland Chamber of Commerce, the issue of most concern to all sectors of business is a current law that will force employers to pay substantially more into the state's unemployment insurance fund.
Under state law, when the reserves in the fund drop to a low level (which is expected before summer), employers, who pay a small percentage of their payroll into the fund every year, are hit with an additional surcharge. According to chamber lobbyist Christopher Costello, the surcharge will cost the state's employers more than $200 million next year "and they just can't afford that. That's going to mean layoffs and that's not what anybody wants."
The chamber, along with dozens of businesses, is pushing to lower the amount of the surcharge and postpone its activation date. "I think the state's borrowing money to keep the fund solvent is preferable to putting people out of work," Costello said.
Champe C. McCulloch, lobbyist for C&P Telephone, said Friday that the surcharge as set in current law would increase his company's contribution to the fund in one year from $320,000 to nearly $3.5 million. "That's a drastic change," he said, that would certainly be passed on to consumers in the form of higher costs.
McCulloch said that C&P and other utilities are concerned about a proposal, back this year for consideration, that would make the Public Service Commission an elective--instead of governor-appointed--body. "From the standpoint of the utilities, that's the kiss of death," he said, since the commissioners would be elected in congressional districts and therefore responsive, he believes, only to their immediate constituents. Legislative leaders have said that this proposal has little chance for passage.
Business also is uneasy about three proposals expected from the Hughes administration. One would create a Department of Labor, Employment and Training, which the unions had demanded of Hughes as part of the price for supporting him during his recent reelection bid. On the other hand, Hughes is expected to increase slightly the budget for the state's Department of Economic and Community Development.
Hughes is also expected to propose changes in the state's prevailing wage laws--another preelection request by labor. The current law has a loophole that allows subcontractors on state contracts to pay any wage rate they choose. The Hughes proposal would close that loophole and force anyone getting 50 percent or more of a state contract to pay the "prevailing"--and usually higher--wage for that job in the area where the contract is in effect.
And finally, Hughes, in an effort to balance next year's budget, will ask the legislature to increase taxes on cigarettes, beer, wine and hard liquor, according to statehouse sources. Hughes will try to increase by two or three cents the wholesale tax on cigarettes (now 13 cents a pack), beer (now 9 cents a gallon), and wine (now 40 cents a gallon), sources have said. Hughes is also intending to increase the levy on hard liquor by a more substantial amount--possibly as much as 25 cents (distilled spirits are taxed at $1.50 a gallon).
Needless to say, the affected industries are concerned by the proposals.
According to Tobacco Institute lobbyist Bruce C. Bereano, the increase in cigarette tax "is of major concern, especially in light of the recent federal increase the federal excise tax on cigarettes was doubled last summer from 8 to 16 cents a pack ."
The same companies are also concerned about a bill introduced by Sen. Stewart Bainum Jr. (D-Montgomery) that would restrict smoking in public places. The bill has come up before but has never passed.
Finally, there is the perennial issue of truck covers. For 20 years, the trucking industry has successfully derailed legislative attempts to force them to place tarpaulins on top of their loads. This year, with the committee chairman who consistently killed the bill gone, supporters of the bill are more hopeful.
Their main opponent will be John Hanson Briscoe, the former Speaker of the House of Delegates, now a lobbyist for trucking interests. "I'm lucky," Briscoe said. "This is one issue where labor and management agree. Neither side wants covers."
As for the year in general, Briscoe agreed the strategy would be to hang back. "With the new people we don't know what kind of legislature this will be," he said. "This is a good year to get to know people and create some good will for next year. Legislators are always statesmen the first couple of years of a four-year term and politicians the last couple. So this year is a good one for setting up what you want to get done next year."