NFIB VT testimony on the new payroll tax, increasing the employer assessment or insurance claims tax, and elimination of small businesses deductions

                                                                     February
23, 2015

RE: Payroll Tax, Employer
Assessment, Deductions

Dear Chairwoman Ancel and Chairwoman Johnson:

On
behalf of NFIB/VT’s members, I’d like to express our concern about the continued
conversations around imposing a new payroll tax, increasing the employer
assessment or insurance claims tax, and eliminating deductions on Vermonter
small businesses.  While I appreciate the
concern for addressing the Medicaid cost-shift; I question why this year of all
year’s it has become a preeminent issue. 
While both committees are under incredible pressure to balance a budget
requiring adjustments to address $130 million deficit; adding this to the mix
seems ill-conceived.

Access to affordable health insurance that provides high-quality health
care remains a top priority for NFIB/VT, but Governor Shumlin had promised he
would eliminate the burden of providing health insurance to employees and save
them money. A proposal to implement a new payroll tax to raise $90 million on
the promise of returning a lower rate of increase in health insurance premiums
provides no certainty in an incredibly uncertain economy.

As you know, NFIB/VT has consistently opposed the imposition of the employer
assessment to fund Catamount Health Plan and now Vermont Health Connect.  This penalty is financial burden being
foisted on small businesses that couldn’t afford to offer health insurance to
their employees.  Eliminating deductions
will hurt small businesses with no ability to plan for this shift.  Increasing the insurance claims tax seems to
only continue to put upward pressure on the cost of health care.

I urge you to slow down and allow cost savings mechanisms currently in
place to continue to work.  Further
tinkering with the health care system should be focused the goal of expanding
options, fostering competition, reducing premiums.

Vermont’s
economy, although showing some green shoots, is relatively stagnant.  Without a vibrant economy – one that
allows for a healthy/solvent small business sector – policymaker will no longer
be able to meet the high expectations they have set for Vermonters.  NFIB/VT believes policies that continue to draw the
lifeblood from business is sending the wrong message to our state’s small
business sector.

Sincerely,

Shawn Shouldice