Statehouse mischief

Friday, Jan. 13, 2006

‘‘Especially during an election year” should be added to the old axiom, ‘‘No man or his property are safe during the Maryland General Assembly session.”

Gov. Bob Ehrlich’s 2002 surprise election sent statehouse lawmakers feverishly thumbing through their state constitutions trying to remember the prescribed supermajority necessary for a veto override. After all, there hadn’t been a meaningful gubernatorial veto (or veto override) in nearly 40 years. That’s the beauty of one-party rule; everything gets settled by the governor and a few legislative leaders without any messy public debate or, God forbid, vetoes.

But that daggone Ehrlich has forced the legislative discourse far beyond its traditional boundaries into the realm of never-before-considered paradigms such as holding the line on taxes and spending within one’s limits. For this Ehrlich must be made to look bad and denied re-election.

In fact, statehouse Democrats are so intent on recapturing the governor’s office and returning Annapolis to one-party rule that they will sanction anything, including bad laws. Which brings us to the Democrats’ shameful willingness to override the ‘‘Wal-Mart bill” veto.

This so-called ‘‘Fair Share Health Care Act” isn’t about health care, it’s about Wal-Mart, which employs nearly 17,000 workers in its 53 Maryland stores. The bill was crafted by Wal-Mart’s enemies, labor unions and rival supermarket chains, to apply only to Wal-Mart (that’s why it’s called the Wal-Mart bill).

On their own, the long-time proponents of universal health care couldn’t get this bill out of committee. But the unions and Wal-Mart’s competitors called in all their chits to pass the bill and override the governor’s veto. In other words, if Wal-Mart was unionized and didn’t sell food, there wouldn’t be a Wal-Mart bill. To repeat, this bill has nothing to do with health care, it’s all about the state helping labor unions and rival grocery chains bust Wal-Mart.

Not only has the legislature injected itself into a non-governmental contest between marketplace competitors (what next, picking sides between Chevy and Ford, Budweiser and Coors?) but it has done so on the flimsiest of rationales; because Wal-Mart spends less than 8 percent of its revenues on employee health care and because Wal-Mart pays such low wages, many of its employees turn to Medicaid, hospital emergency rooms and other public-financed sources of medical care. ‘‘While Wal-Mart reaps multi-billion dollar profits, taxpayers take care of a significant portion of the company’s employee’s health care. That’s neither fair nor affordable,” says state Sen. Gloria Lawlah.

Welcome to the Brave New World of state ‘‘fair-share standards” for employee fringe benefits. In addition to minimum wages, the state now wants to set ‘‘minimum benefits.” From now on state lawmakers will decide the proper amount of vacation time, life insurance, coffee breaks and Christmas bonuses employees deserve.

And the new criterion for anyone’s presence in Maryland is whether or not you create a ‘‘net burden” on state taxpayers. So, using the Wal-Mart bill’s reasoning, let’s place a special tax on the NFL Ravens whose taxpayer costs far exceed their economic benefit to the state. Likewise, we should levy a special ‘‘Wal-Mart tax” on every new Maryland homeowner whose tax payments (of every kind) don’t equal the public cost of schools, roads, public safety, etc. necessary to support that family.

The legislature’s new ‘‘fair share” test is not only mindless, it’s hypocritical. There are plenty of medium and small Maryland businesses that, like Wal-Mart, don’t spend 8 percent of their revenue on employee health care resulting in a similar ‘‘net burden” on taxpayer-financed health services. Why aren’t these businesses covered by the bill, too? Why only Wal-Mart?

Maryland’s two leading bastions of anti-Ehrlichism, the Baltimore Sun and the Washington Post both strongly oppose the bill, which the Post called, ‘‘a legislative mugging masquerading as an act of benevolent social engineering.”

But what’s most alarming about the Wal-Mart bill is that it punishes the very innovation and ingenuity that built this nation. Wal-Mart has developed a new business model, based on disciplined efficiency and a low-cost, non-unionized workforce, that outperforms its competitors by delivering less expensive consumer goods to an appreciative public. And, like it or not, Wal-Mart’s business model is the way of the future.

Saddled with unaffordable union contracts (and incompetent management), American companies can’t compete in worldwide markets. But instead of letting entrepreneurs invent new, competitive approaches, the Maryland legislature is telling Wal-Mart, ‘‘No, you must be like all your obsolete competitors who can’t hack it anymore.” That’s short-sighted protectionism at its worst. Maryland’s Wal-Mart tax isn’t really a tax, it’s a tariff.

No one is suggesting a return to the evils of laissez faire capitalism. But If America wants universal health care it should do so comprehensively with clear agreement on who benefits and who pays, not on a discriminatory, destructive basis.

Overriding Governor Ehrlich’s veto makes the Democrats, not the governor, look bad and offers a strong argument for more two-party government, not less.

Blair Lee is CEO of the Lee Development Group in Silver Spring and a regular commentator for WBAL radio. His column appears Fridays in The Gazette. His e-mail address is blair@leedg.com.