Wal-Mart continues with plans in Somerset

Health care bill may influence expansion

June 04, 2005|By David Nitkin | David Nitkin,SUN STAFF

Retailing giant Wal-Mart's plans to expand in Maryland are continuing, after the governor's veto of a bill that would have taxed the company if it didn't spend enough on employee health care - just as an effort to overturn the governor's veto is getting under way.

The company will meet a July deadline to purchase land in Somerset County for a proposed distribution center that would bring 800 jobs to the area, an official told an Eastern Shore newspaper this week.

Gov. Robert L. Ehrlich Jr. traveled to Somerset last month to veto a bill that would tax large companies - effectively just Wal-Mart - which fail to spend 8 percent of their payroll costs on employee health insurance.

The highly orchestrated visit was designed to highlight the possibility that Wal-Mart could abandon its plans if the proposal became law.

"At this point, we are continuing to move forward with the distribution center, and remain hopeful that the Maryland legislature and all interested parties will see this bill for what it is: an attempt by national unions to make Wal-Mart less competitive in the state," company spokesman Nate Hurst said yesterday in an interview with The Sun.

But others are pushing to make the bill take effect.

A group of Johns Hopkins University medical and nursing students joined a handful of political leaders yesterday in urging the Assembly to override Ehrlich's veto of the so-called Fair Share Health Care Act. Advocates said they were mounting a statewide effort to set aside the governor's decision when the Assembly reconvenes next year.

"We're here to urge the state legislature to overturn that veto," said Anand Narayan, a first-year medical student, during the gathering at the medical school.

The event "is the beginning of a grassroots effort throughout the state," to convince lawmakers that the bill must become law, said Vincent DeMarco, president of the Maryland Citizens' Health Initiative.

The competing views over whether government should require health care spending for private companies illustrates a sharp divide in Maryland and national politics.

Democratic leaders argue that Wal-Mart is skirting responsibility by not providing sufficient health coverage to workers, adding to the number of uninsured residents who turn to the state for treatment.

Republicans counter that the Maryland bill would create a hostile environment for business and that a free market should determine benefit levels. The company says it offers a range of medical plans for its workers.

The Maryland legislation, adopted by the Assembly this year, is considered the first of its kind in the nation and has become a model for other states grappling with burgeoning ranks of uninsured citizens and growing Medicare costs.

The state bill, backed by a coalition of labor groups, business leaders and community activists, would require companies with 10,000 or more employees to spend 8 percent of their payroll costs on health care or pay the difference to the state as a tax.

In Maryland, only Wal-Mart would be required to pay the tax; other large companies meet the requirement.

The governor has said the bill creates a perception that Maryland is unfriendly to business, and talk radio host Rush Limbaugh has on his nationally syndicated show criticized the Assembly for its passage.

"I wouldn't want Rush Limbaugh setting policy for the state of Maryland," said Montgomery County Executive Douglas M. Duncan, a likely Democratic candidate for governor, who attended the Hopkins event yesterday.

Sen. Paula C. Hollinger of Baltimore County, a nurse and head of the Education, Health and Environmental Affairs Committee, predicted the override effort would be successful. Wavering lawmakers in rural and conservative-leaning areas likely have many Wal-Mart employees as constituents who would benefit from the bill's enactment, she said.

But Sen. J. Lowell Stoltzfus, a Republican who represents Somerset and other Eastern Shore jurisdictions, said lawmakers who voted for the bill are getting an earful.

"I think that a tremendous amount of heat has been applied, and I hope a number of people understand that a veto override would be counterproductive," Stoltzfus said. "The local delegates have taken a tremendous amount of heat wherever they go. It will have an impact in the next election."

Stoltzfus, the Senate minority leader, was among the first to raise the possibility that Wal-Mart could retrench in Maryland if the bill passed. Somerset badly needs the jobs, which would pay on average $12 an hour.

The Daily Times of Salisbury reported yesterday that Wal-Mart officials were planning to meet a July contractual deadline to purchase 200 acres for the center, although a company manager told the newspaper that the purchase did not guarantee construction. "Real estate can be easily sold as it is bought," John Bisio, a community affairs manager, was quoted as saying.

Stoltzfus said a company official told him at last month's veto ceremony that Wal-Mart planned to buy the land. "But this bill, if the veto is overridden, it will enter into our consideration about whether we will build here," Stoltzfus said he was told.

Asked whether a veto override would halt construction, Hurst, the Wal-Mart spokesman, said: "We will address that issue when it comes.

"But right now the governor gave us some confidence that the state of Maryland does have some people who respect a business that employs over 15,000 people in the state and hopes to continue in the state," Hurst said.

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