Central Pension Fund

Political Courage on Healthcare in Maryland

In January of this year, in an act of political courage, the Maryland legislature stood up to Wal-Mart on behalf of Maryland taxpayers. They did so by overriding a veto by Maryland’s governor of legislation originally adopted in 2005.

The legislation is intended to reduce the tax burden on Maryland citizens created by the thousands of uninsured employees of Wal-Mart who qualify for state-funded Medicaid healthcare, because their Wal-Mart paychecks place them below the poverty line.

The legislation requires that the very largest employers in Maryland, those with more than 10,000 employees, either pay 8% of payroll for employee healthcare, or make an equivalent payment to the state’s Medicaid insurance program. The three other largest employers in Maryland are already providing such coverage to their employees, only Wal-Mart does not. After the legislation was adopted in 2005, Wal-Mart set about securing a veto by Maryland Governor Robert L. Ehrlich, Jr. Wal-Mart had previously hosted a fundraiser for Ehrlich, and the Company successfully convinced him to come to its aid. Indeed, in a show of arrogance, a Wal-Mart senior executive sat next to the Governor as he signed the veto.

In order to override the veto, a two-thirds majority vote was required in both houses of the Maryland legislature. Wal-Mart put together a full-court press to defeat the override, hiring a raft of Maryland’s most prominent lobbyists. But it didn’t work. Instead of bending to the will --- and political contributions of Wal-Mart --- the state legislature stood up for both the healthcare of Maryland’s citizens, and the pocketbooks of Maryland’s taxpayers.

Immediately after the vote, the Governor’s spokesman was quoted in The New York Times as saying that the Maryland lawmakers had started “marching down the road to socialized medicine.” Why is it when workers win health protection it’s called socialism, but when the rich get tax breaks it’s called fairness?

As employers continue to abandon both healthcare and pension benefits, the taxpayers will ultimately pay the costs for maintaining the sick and the elderly in our country. Unless workers can secure the protection of health and pension benefits through collective bargaining --- something that federal law has made increasingly difficult --- then citizens can only turn to their elected representatives for relief. And, since the federal government has done absolutely nothing to foster private-sector healthcare and pension security, state governments have been thrust into the position of leadership.

Maryland has set an example that more state legislatures can be expected to follow. If not, the Wal-Marts of the land will continue to leave taxpayers holding the bag for their employees’ healthcare --- while they continue to reap billions in profits.

January 24, 2006