PRINCESS ANNE - Wal-Mart Stores Inc. said yesterday that it would delay for three to four years the construction of an 800-job distribution center planned for Somerset County.
The new timeline - 2008 or 2009, rather than this summer - was disclosed shortly before Gov. Robert L. Ehrlich Jr. vetoed the so-called Wal-Mart bill, which would have required the retail giant to spend 8 percent of its Maryland payroll on health care or pay a tax.
The governor was joined by the chief operating officer of Wal-Mart's U.S. stores at a ceremony in this Eastern Shore town that drew a crowd of several hundred - including several dozen protesters.
Although Wal-Mart officials attributed the construction delay to new "efficiencies" in its distribution system, Aris Melissaratos, the state economic development secretary, blamed part of the wait on the bill, the first of its kind in the nation.
Democrats threaten to override the veto in January, arguing that taxpayers are indirectly subsidizing the company's health care costs through government programs and hospital fees.
The presence of Wal-Mart's Eduardo Castro-Wright in tiny Princess Anne, the Somerset County seat, underscored how high the stakes are for the retailer as it battles efforts by the Service Employees International Union and others to duplicate the health care legislation nationwide.
"By vetoing this bill, Gov. Ehrlich has drawn a line in the sand," said Castro-Wright, warning that legislators might next try to apply the bill to every employer. "This issue is much bigger than Wal-Mart."
It has in fact become a lighting rod for groups across the country, from unions to business organizations, as various interests struggle over rapidly rising health care costs and who should pay for them.
Some of those groups turned up in Princess Anne to have their say and were angered when police ordered them to put away their signs.
SEIU sent organizers with its Maryland for Health Care project to pass out "I'm-a-health-care-voter" stickers to anyone in the crowd who would take them. The AFL-CIO hired an airplane to fly overhead, towing a sign that declared, "Marylanders Want Fair Share Health Care."
Tom Hucker, executive director of Progressive Maryland, a nonprofit that worked on the bill, stood on the street corner opposite the governor and said that his group spends close to 20 percent of its payroll on health-care costs.
"If we can afford it, Wal-Mart sure can," he said.
Ehrlich said he chose Somerset as the backdrop for his veto because the bill "threatens the economic health of this terrific county," the poorest in the state and one eager for 800 jobs paying average starting wages of $12 an hour. He characterized the issue as a fight over future job growth in Maryland, not just the Eastern Shore.
"Without employers, there's no employees," he said. "There's no health care."
Wal-Mart estimates that it spends 7 percent to 8 percent of its payroll on health care. It defended its coverage, noting that part-timers as well as full-timers are eligible for medical benefits.
The bill covers Maryland businesses with at least 10,000 employees but only affects Wal-Mart because the handful of other large employers already meet the 8 percent threshold - including Wal-Mart competitor Giant Food, which lobbied for it.
Giant said yesterday that it hopes the legislature will overturn the veto because employers with uninsured workers are driving up the grocery chain's costs. About 7 percent of Maryland hospital charges go to cover the expense of uncompensated care.
Wal-Mart recently signed a contract for land several miles south of Princess Anne on which it plans to build the distribution center, and a spokesman said the construction delay is not related to the health care bill.
But if the veto is overturned, "the project could well be reviewed," Castro-Wright said in an interview before the news conference. Wal-Mart earlier this year shut down its first unionized store in North America, a center in Canada.
Maryland Democrats said they intend to make sure the bill becomes law, despite Wal-Mart's veiled suggestion that it would take its business elsewhere.
"For each employee the distribution center creates, it will also cost the state $2,000 a year in subsidies," said Senate President Thomas V. Mike Miller, who predicted that the veto will be overridden. "We welcome everyone to Maryland but we recognize at the same time that everyone who does come needs to pay their fair share."
Said House Speaker Michael E. Busch: "Wal-Mart is not going to be deterred from coming here. ... They know the marketplace is a good one."
But Ehrlich won kudos from business groups, including the U.S. Chamber of Commerce, which called the bill "irresponsible."
"We think it's an incredibly dangerous precedent," said William Miller, the chamber's political director.