March
12, 2015
The
Honorable Janet Ancel, Chairwoman
House
Ways & Means Committee
State
House
Montpelier,
VT 05602
RE: Payroll Tax and Employer Assessment
Dear
Representative Ancel:
On
behalf of the members of National Federation of Independent Business in Vermont
(NFIB/VT), I’d like to make clear our opposition to the House Health Care Committee’s
health care bill. As the Legislature deals with a $120M budget deficit, it seems
counterintuitive to simultaneously support increased spending at many levels
including a request for increased Medicaid spending to address a portion of the
$135M cost shift caused by chronic program underfunding.
NFIB/VT
appreciates the House Health Care Committee’s offer to repeal the Employer
Assessment (EA) and acknowledgement that it really has become a penalty (see
ex. on pg.2) on small business for doing what they were encouraged to do. This
tax, which raises $18 million on the backs of small business owners, should
have been repealed years ago.
Additionally,
NFIB/VT opposes the imposition of a new Payroll Tax. Vermont’s small businesses and their
employees cannot afford another $45M out of their pockets.
To the
bigger picture, NFIB/VT urges you to
wait for the Auditor’s report and a full financial accounting of all transactions
(eligibility determinations, income verifications, premiums and subsidies,
provider payments, etc.) must be conducted of the flawed roll-out of VHC to
ensure public monies were appropriately spent and Vermonters adjustments are appropriately
accounted. Such adjustment risks could
amount to millions of dollars currently not budgeted.
The
outcome and consequences of continuing down the path proposed by Governor
Shumlin is premature at best and irresponsible at worst.
In January, Governor Shumlin and most legislators said they heard the
concerns over affordability from Vermonters. Imposing a new $45 million dollar payroll tax
on small businesses and their employees to increase spending does nothing to
address affordability or to create a more certain business climate. Governor Shumlin’s agenda strains
small businesses, and impedes growth and the ability for a business to add jobs
in this high cost state’s increasingly anti-business climate. Without a vibrant economy – a healthy/solvent
small business sector; policymaker will no longer be able to meet the high
expectations that they continue to set for Vermonters. These policies continue to draw the lifeblood
from those who can least afford to pay.
NFIB/VT
urges you and the Committee not to fall for the Governor’s short-sighted
proposal and table legislative action that will increase spending and require
higher taxes. We urge you to look at a
long-term solution rather than a one-year fix that Vermont small businesses cannot
afford.
Sincerely,
Shawn
Shouldice
cc:
Members
of the House Health Care Committee
Governor
Peter Shumlin
Lt. Governor Phil Scott
Senate President Pro Tempore
John Campbell
House
Speaker Shap Smith
NFIB/VT Leadership
Council
Employer Assessment is a
Penalty and should be Repealed
Examples of Governor Shumlin and Administration Staff
Encouraging Businesses to Drop Health Insurance Coverage
NFIB/VT
continues to oppose the imposition of the Employer Assessment and further
increases. First, this tax was a funding
mechanism for Catamount Health, and then a funding source for the operation of
Vermont Health Connect via the $256M State Health Care Resource Fund (SHCRF),
and it was last year used to “fill the $3M budget gap”.
The
Employer Assessment Tax currently raises $18M on small businesses who do not
offer health care to their employers. To
make matters worse it has been at the encouragement of the administration and
the legislature for small business owners to drop their coverage on the promise
of removing the health care burden from small businesses. Now it is being sought as a penalty.
Remember this whole health care reform effort was supposed to be about
providing access to all Vermonters and pitched as a way of removing the
employer burden of offering health insurance.
In fact Governor Shumlin said moving in the direction of single-payer
would be an economic boon for Vermont.
1.
VTDIGGER Reports on Aug. 12, 2012: “The Shumlin
administration has said it would encourage small employers to drop insurance
coverage of individuals so that they can qualify for subsidies.”
2.
VPR Reports on Sept. 7, 2012: “Shumlin
says the federal law includes subsidies for people who make less than $47,000 a
year and that’s why he’s encouraging small Vermont businesses to drop their
health care coverage so their employees can purchase their insurance through
the exchange.
“The Affordable
Care Act will encourage small employers like me, business people like me to say
we’re going to help you go to the exchange subsidize, raise your wages so you
can go directly to the exchange to buy your insurance,” said Shumlin.
“We are decoupling health care from employment which is incredibly
important to job growth.”
3.
VTDigger Reports on May 14, 2013: Rep. George Till,
D-Jericho, raised the issue during debate on the floor of the House of
Representatives – “It seems like we have it backwards,” he said. “We have been
encouraging employers explicitly or implicitly to drop insurance so that their
employees can bring down federal subsidies.
On one hand we’re telling employers to drop employees,” he added, “but
then we’re turning around and saying we’re going to make you pay for the exchange.”
