Gov. Robert L. Ehrlich Jr. plans to veto a bill tomorrow that would force Wal-Mart Stores Inc. to pay more for its employees' health care, saying jobs could be at risk if the legislation becomes law.
He will travel to Princess Anne in Somerset County to sign the veto, a move designed to highlight "the county expected to suffer most largely from the passage of the bill," according to a news release.
But state officials now say they expect the retail giant to build a distribution center in Somerset County - even if the legislature overrides the veto - because of the incentives Maryland has provided and the market opportunity Maryland presents.
The governor's spokeswoman and Aris Melissaratos, the state business and economic development secretary, said yesterday that they expect the construction of the distribution center to be delayed but not canceled.
"I think we're too good a market to pass up," Melissaratos said. "I think they'll keep negotiating with us and we'll keep negotiating with them and we'll come to some middle ground. ... I really think their record on health care is not as bad as those that passed the legislation would make you believe, and in fact they can probably meet the test without paying too much additional tax."
The bill has won national attention and is being considered a model by lawmakers in other states. It would require all companies in Maryland with more than 10,000 employees to spend at least 8 percent of their payroll on workers' health care or pay a tax to make up the difference. Wal-Mart currently is the only company that would be affected.
Melissaratos said the company is moving much slower on the project than it did initially and has stopped discussions altogether on a Western Maryland distribution center that had been in the works.
A Wal-Mart spokesman would not say yesterday if a decision has been made on whether to scrap the Somerset distribution center, which is expected to provide at least 800 jobs when it is fully operational.
But the spokesman, Nate Hurst, confirmed that Eduardo Castro-Wright, the executive vice president and chief operating officer of Wal-Mart's stores division, will join Ehrlich and speak at the veto ceremony.
Another company official who has been involved in the local negotiations on the project will also be there and will have more to say about the company's plans, Hurst said.
"We are still working through the plans, but you certainly have to take a step back and take a look at the business climate in a state like Maryland where such bad anti-business legislation passed, unfairly targeting individual companies like this bill does," Hurst said. "That's a very bad precedent."
Sen. J. Lowell Stoltzfus, the minority leader who represents the Lower Shore, said he hopes Wal-Mart won't back out of the project, noting that Somerset County needs the jobs so badly that even a delay would be damaging.
"Somerset County is the most economically depressed county in the state," the Republican legislator said. "You put 1,000 new $12-an-hour jobs in this county, it would be the largest employer. It would just be an incredible impact."
The announcement of the veto plan caught the attention of WakeUpWalmart, a project of the United Food and Commercial Workers Union, which yesterday called on its supporters to contact Ehrlich's office and ask him to let the bill become law.
The UFCW, which has failed in its bid to unionize any Wal-Mart store in the United States, helped push the bill through the General Assembly this spring.
WakeUpWalmart campaign director Paul Blank said lawmakers in New Jersey have introduced a bill based on the Maryland legislation. A legislator in Pennsylvania has announced his intention to do the same.
Wal-Mart's pay is so low and its health plan so expensive for employees that workers often forego health insurance and enroll in government-financed health plans instead, meaning that the company is being indirectly subsidized by taxpayers, Blank said.
"Obviously, the governor has already made up his mind," he said. "This is an effort more to highlight the fact to Governor Ehrlich that multibillion-dollar corporations with over $10 billion in profits should have to pay their fair share of health care."
Melissaratos said backers of the legislation are disingenuous in calling it the "Fair Share" bill. The legislation, he said, is less about providing health care for workers than it is about helping Giant Food and Safeway, large grocery companies that face competition from Wal-Mart but spend more than the bill requires on health care.
Giant Food was a major backer of the bill. Company officials say the grocery chain spends more than 20 percent of its payroll on health care.
Sen. Thomas M. "Mac" Middleton, chairman of the Finance Committee and a major supporter of the bill, said businesses should support the legislation.
Maryland hospitals charge patients with insurance more to compensate for those who can't pay, meaning companies that provide insurance indirectly subsidize those that don't through higher premiums, he said.
The Charles County Democrat thinks the odds are good that the legislature would override Ehrlich's veto, because the bill gets at one of the most important questions facing the state.
"It's been billed by the opponents as a tax on business, but really and truly it's trying to get at who's going to be responsible for and who's going to pay for health care," Middleton said.
