12/18/2007
The Rendell administration's efforts this session to expand government programs and continue massive borrowing were dealt a setback as state lawmakers rejected a series of tax increases to pay for them. In all, lawmakers rejected seven tax increases proposed by the governor to pay for nearly $2 billion in new spending -- despite a record surplus. Lawmakers cautioned the proposed tax levies would lead to millions of dollars in direct and indirect costs to small employers and jeopardize jobs.
NFIB members were instrumental in leading the fight against several of the proposed increases, including raising the state sales tax to 7 percent; a new tax on electricity usage; a new payroll taxes to pay for health care for the uninsured; a new gross receipts taxes on home heating and wholesale oil distributors; higher trash taxes; and new and higher taxes on tobacco, cigars and cigarettes.
Small-business victories
Several NFIB-supported proposals made their way to the governor's desk. In December, legislation raising to $50 the amount that businesses can collect from individuals convicted of passing a bad check was signed into law by the governor. The bill is awaiting action by Gov. Ed Rendell. In July, the governor signed into law measures to reduce hospital-acquired infections and legislation to expand the scope of practice of a variety of health professionals.
We also helped defeat a costly lower-court ruling that would have required business owners to hire lawyers for unemployment compensation appeals hearings. NFIB's Legal Foundation filed a brief in the case Harkness v. PA Unemployment Compensation Board of Review. The foundation argued that small-business owners should be able to use non-attorney representation, just like claimants, to represent themselves in unemployment compensation proceedings. The Pennsylvania Supreme Court agreed.
NFIB helps blocks new mandates
Our members were critical in blocking a host of new employer mandates that would raise the cost of doing business and chip away at an employer's ability to manage their workers. Chief among these was the defeat of Gov. Rendell's plan to impose a payroll tax on employers to pay for health care for the uninsured. The NFIB Research Foundation reported the tax plan would affect 50 percent of Pennsylvania's small businesses; cost businesses $2 billion annually and result in $10 billion in lost sales and over 100,000 lost small-business jobs over five years.
Members also helped to twice scuttle votes on two bills -- HB 1756 and HB 1757 -- that mandate worker coffee breaks and lunch breaks and the times at which small-business owners must provide them. They included fines up to $2,500 for employers who failed to comply.
Members awere instrumental in an effort to postpone votes on a state House resolution urging Congress to pass the federal "Employee Free Choice Act." Also know as "card check," the federal legislation would take away the right of workers to vote by secret ballot to decide whether to join a union. The legislation would enable unions to organize simply if a majority of workers sign cards. The measure also would require employers to negotiate a contract with the union within 120 days of card-check recognition and force small employers to abide by mandatory binding arbitration where a government official would intervene and set all terms of pay and benefits for that workplace.
Much left unfinished
The State House failed in 2007 to act on an NFIB-supported health care reform proposal offered by a group of state lawmakers and led by former NFIB member state Rep. Scott Boyd (Lancaster). The plan would allow insurers to offer basic health-insurance policies for small businesses, including sole proprietors and individuals; include tax credits for employers who contribute to their worker's health savings accounts; provide tax credits for businesses and individuals who participate in wellness programs and disease management protocols; require doctors and hospitals to disclose medical charges and reimbursement rates; and provide for a 'mini-COBRA' for workers who lose their jobs to continue to purchase group benefits.
The state Senate postponed action on a measure proposed by state Sens. Bob Regola (Westmoreland) and Mike Folmer (Lebanon) to limit spending growth and protect taxpayers against future tax increases.
Lawmakers also failed to act on a package of reforms to reduce junk lawsuits and costly lawsuit abuse practices. The reform package includes protections from liability for innocent retailers, provides reasonable time limits for manufacturers to be held liable for a product, requires all civil cases to be held in the county where the alleged injury occurred, requires plaintiffs to pay damages proportionate to their share of liability, and proposes to change the state Constitution to allow lawmakers to cap non-economic damages.
The State House also recessed without taking action on reforms to make Pennsylvania's unemployment compensation system fairer and more consistent with other states. Pennsylvania has one of the most expensive compensation systems, which is preventing companies from coming to Pennsylvania. This year, employers will pay about $2 billion in unemployment compensation benefits. The employers' average unemployment compensation tax rate is estimated at 5 percent.
