02/09/2005
CONTACT: Kevin Shivers, (717) 232-8582
Small-business owners fear proposed agreement with Blue Cross/Blue Shield all but guarantees huge premium hikes for policyholders
PENNSYLVANIA -- Pennsylvania's largest small business group, the National Federation of Independent Business, today thanked Governor Ed Rendell for rejecting a proposal by the Business Tax Reform Commission to impose new taxes on small business. Gov. Rendell unveiled his business tax plan – minus a proposed tax on small, subchapter-S companies and Limited Liability Companies, as part of his 2005-06 state budget presentation to the General Assembly.
NFIB/Pennsylvania State Director Kevin Shivers noted that small-business owners still are worried the Rendell administration's proposed agreement with Pennsylvania's four Blue Cross/Blue Shield plans to fund the state's adult basic insurance program all-but-guarantees a dramatic increase in the cost of doing business for small employers.
"The Business Tax Reform Commission's plan was flawed from the start," Shivers said. "Virtually all of Pennsylvania's businesses are small – and most of these firms would have watched their tax bills grow under the commission's plan unveiled last November.
"Thankfully, Governor Rendell listened to small-business owners' concerns and ignored this reckless recommendation to impose a new tax on our best job creators who already were hit with a tax increase 14 months ago."
Shivers said NFIB would continue to work with the governor, the legislature and Pennsylvania's other business groups, including the state Chamber of Business and Industry and the Pennsylvania Manufacturer's Association, to enact a business tax reduction plan that reduces the tax burden on all businesses and makes Pennsylvania competitive with other states.
While the governor's business tax plan doesn't raise taxes on small businesses, Shiver said the small-business group is concerned that the proposed agreement with the Blues would amount to a huge increase in the cost of doing business in Pennsylvania for many small firms.
"Proponents of this plan claim that it will help define the Blues 'charitable mission,'" said Shivers. "But it's easy to be charitable when you are spending someone else's money. Make no mistake; the money to fund the state insurance program for low-income and uninsured Pennsylvanians comes directly out of the pockets of Pennsylvania's small-business owners and policy-holders.
"The fact is, health insurance premiums already are the fastest growing cost of doing business. Pennsylvania's smallest job creators have been battered by double-digit premium increases for several years – and many are on the verge of dropping coverage altogether. For small-business owners struggling to provide their workers with good insurance, this proposal likely could be the straw that breaks the camel's back."
