Blog post by Andrew Griffin
Andrew Griffin is the vice president of government affairs at the Maryland Chamber and leads advocacy efforts on behalf of the 5,500+ members of the Chamber before the Maryland General Assembly and on a federal level. He develops, leads and executes the legislative strategy of the organization and maintains the Chamber’s positive working relationships with key elected officials and members of the administration to build a better understanding of and appreciation for business issues.
The conclusion of each Maryland legislative session is often met with mixed reviews by the state’s employer community. It is common for the Maryland General Assembly to pass policies supporting a strong business climate while simultaneously passing others creating challenges. However, the 2021 legislative session should be considered a success for Maryland employers when comparing the outcomes to the top business priorities heading into January. Legislative leaders worked alongside Governor Hogan to pass a significant state stimulus package, address the rising costs of unemployment insurance, while largely following through on the “do no harm” mentality the Chamber championed heading into session. Here are the top three wins for Maryland employers this session:
1. Limiting the rising cost of unemployment insurance taxes
Due to economic shutdown as a result of the COVID-19 pandemic, employers of all sizes were forced to lay off employees through no fault of their own. These layoffs were on track to cause a dramatic spike in the unemployment insurance taxes employers pay as a result of the negative impacts on the two factors determining those rates; an employer’s experience rating (a function of how many people have claimed unemployment against that employer over the previous three years) and the state’s current table of tax rates (a function of the level of the unemployment insurance trust fund). The Governor and General Assembly took swift action to prevent these drastic increases by passing two key pieces of legislation and utilizing federal dollars to help prop up the unemployment insurance trust fund. SB 811, sponsored by Senator Hershey (R-Upper Shore), will prevent a dramatic slide from Table A to Table F by phasing in the state’s shift in the tax tables over several years. SB 496 or the RELIEF Act, sponsored by the Senate President but in conjunction with the Governor, addressed the hit to employers’ experience ratings by not counting layoffs that occurred during 2020 in the Department of Labor’s calculation. This should leave experience ratings the same as they were in 2020 for 2021. Finally, the more than $1 billion in federal funding being used to backfill the unemployment insurance trust fund will help buoy the trust fund balance preventing additional shifts in the state’s rate tables in future years.
2. RELIEF Act of 2021
The RELIEF Act, passed with strong support of the Governor and legislative leadership, provides sales tax credits for small businesses, COVID-19 loan and grant forgiveness, and an additional $500 million in new funding for programs and grants for businesses and nonprofits, housing, health, unemployment insurance, energy assistance, education and human services. The sales tax credits are a nearly $200 million commitment providing credits of up to $3,000 per month for three months—for a total of up to $9,000. This relief will directly help more than 55,000 Maryland small businesses. The RELIEF Act’s loan and grant forgiveness plan would safeguard Maryland business owners against any tax increase triggered by the use of state loan or grant funds. This relief will save businesses an estimated $36 million. The RELIEF Act was a strong commitment to Maryland’s economic recovery and sustainability.
3. New Office of Statewide Broadband
The Maryland General Assembly also passed the Digital Connectivity Act of 2021, which Governor Hogan has already signed into law. The law establishes the Office of Statewide Broadband (OSB) to work toward getting all Marylanders connected to high-speed, affordable broadband internet by 2026. The OSB is expected to help administer the $300 million in funding from the federal government’s American Rescue Plan that Maryland allocated toward the expansion of affordable and reliable internet. The bill sets out a goal of providing internet to the 23%, or 520,000, households, that lack wireline internet access. Many Maryland employers and employees struggled during the transition to working from home due to the lack of access to affordable and reliable internet service. Additionally, the Office of Statewide Broadband will work to form partnerships with local jurisdictions, state agencies, the library system and the private sector to identify critical resources and funding, as well as ways to expand digital literacy across the state. The OSB will fall within the Maryland Department of Housing and Community Development.
These legislative wins are critical in supporting Maryland’s business community on our road to economic recovery. We also know that 2022 will prove challenging with major issues likely to be addressed such as taxes and new leave benefits. Let’s take a moment to enjoy these victories after a very challenging year and a memorable legislative session.
Learn more about the 2021 Maryland legislative session and the efforts of the Maryland Chamber of Commerce here.