Two prominent business groups issued a joint statement Monday in opposition to Gov. Peter Shumlin’s payroll tax proposal, a modified version of which passed a House committee last week.
The Vermont Chamber of Commerce and the Vermont Business Roundtable say imposing a payroll tax to reduce the Medicaid cost shift is “bad public policy,” and won’t deliver health insurance premium savings to businesses as the governor has promised.
The two organizations say state spending has outstripped revenues, workforce growth and wage growth in Vermont. They argue that it is not the right time to introduce a “new broad-based tax” on businesses.
Even the more modest payroll tax included in the health care packaged approved by a House committee last week is “unpalatable,” said Betsy Bishop, president of the Vermont Chamber of Commerce, despite some “sweeteners” added to the proposal, such as eliminating the employer assessment.
“For many small businesses – the vital engine to Vermont’s economy – the imposition of a payroll tax of any amount will, quite literally, wipe out their already slim margins,” Bishop said.
Bishop speculated that the administration suggested that the House Health Care Committee eliminate the assessment, which businesses pay for not offering health insurance or for employees who don’t take the coverage they offer, in order to appease the business community. Though the assessment is flawed, Bishop said she doesn’t think it needs to be eliminated.
The problem with the assessment, according to Bishop, is that firms must pay the levy for employees who are covered by other means, such as through a spouse’s insurance.
Lisa Ventriss, president of the Vermont Business Roundtable, said the administration is just “playing with different buckets of money” and there is little trust in the business community that the estimates of costs and savings coming from Shumlin’s team are accurate.
Ventriss, who served on the governor’s Business Advisory Council for Health Care Reform — which helped to vet his tabled single-payer plan — said the morphing health care initiatives emanating from the governor’s office have created “uncertainty” that is hurting the economy.
The governor and administration officials have argued the premium savings will hold businesses that offer good health care harmless, while forcing others to have more skin in the game when it comes to paying for a high quality health care system that benefits everyone.
