Maryland Governor Vetoes Wal-Mart Health Spending Bill

May 20, 2005 ( - Maryland Governor Robert Ehrlich Jr. on Thursday vetoed a bill effectively forcing retailing giant Wal-Mart to step up its employee health benefit spending - a measure that has prompted other states to try a similar approach.

The Fair Share Health Care Fund Act would have required Maryland employers with more than 10,000 employees to spend at least 8% of their payroll on health care benefits – a mandate that currently would apply only to Wal-Mart, according to an  Ehrlich news release.

>Ehrlich complained that the measure would have threatened Wal-Mart’s plans to build a distribution center in the state since the company insisted it would have to reconsider the plan if the bill became law.

“This bill directly threatens jobs and economic development in Maryland,” Ehrlich said in the press announcement. “This irresponsible legislation sends a terrible message to employers who consider relocating and creating jobs in Maryland. This tax could cost our Eastern Shore hundreds of jobs in the foreseeable future and put thousands more at risk statewide if other large employers move out of Maryland to avoid new taxes.”

Job Claims

>The governor claimed t he Wal-Mart distribution center will provide Somerset County up to 750 jobs at an average of $12 an hour, $2.50 more than Somerset County’s current average wage. The opening of the center has the potential to lower the unemployment rate of Maryland’s three Lower Eastern Shore counties, three of the highest in the state, by one full percentage point, Ehrlich asserted.In total, the Somerset County center would bring in $650,000 annually in tax revenue over the life of the project, he said.

>According to a Washington Post report, the Arkansas-based Wal-Mart is moving ahead with the facility, which could employ more than 800 people. But Eduardo Castro-Wright, the second-ranking executive at Wal-Mart’s US division, said before Ehrlich’s veto ceremony that Wal-Mart still might rethink its plans if lawmakers overturn Ehrlich’s veto when they convene again in January.

Singles Out

“It singles a company out in a way that is discriminatory,” he said, according to the newspaper. The heavily Democratic legislature passed the measure by a wide margin.

>Lawmakers in Pennsylvania (See  Another State Takes Aim at Wal-Mart’s Health Care ) and New Jersey are moving in a similar direction to Maryland, and Wal-Mart’s opponents have rallied around the health care issue as they try to slow the chain’s growth.

Ehrlich’s veto message is  here.