(Host) A survey of several leading Vermont business organizations shows strong opposition to Governor Jim Douglas’s plan to tax health care premiums. The groups say this policy penalizes those businesses that are doing the right thing by offering health insurance to their employees.
VPR’s Bob Kinzel reports.
(Kinzel) The three groups, the Vermont Chamber of Commerce, the Vermont Business Roundtable and Vermont Businesses for Social Responsibility represent hundreds of small, medium and large companies throughout the state.
While the groups have different ideas about how to finance health care reform, they do agree on one thing: Governor Douglas’s plan to tax health care premiums is a bad idea because it hurts those businesses that offer insurance and doesn’t really affect the companies that don’t.
Douglas claims consumers and businesses won’t be affected by the tax increase because insurance companies will absorb the additional costs but the business groups all believe that the governor is wrong on this point.
Duane Marsh is the executive director of the Vermont Chamber of Commerce. The Chamber often supports the policies of the Douglas Administration but not on this issue.
(Marsh) “The insurance companies are telling us that it would be harmful to them and we believe them we think that that tax may be onerous and they have stated so. So we think they’re probably in the best position to judge. So we just think that they’re the ones who should make that decision.”
(Kinzel) Marsh says the Chamber would like lawmakers to lower the cost of insurance by eliminating mandates and the system of community rating.
Lisa Ventriss is the president of the Vermont Business Roundtable. She has the same concerns about the governor’s plan. And Ventriss thinks a limited payroll tax is a better alternative.
(Ventriss) “That was receptive to us because we felt again that there was an effort to hold harmless if you will, those companies that are currently providing insurance from having to pay again.”
(Kinzel) Ventriss says her organization is urging lawmakers to pass a number of cost containment provisions, now and then study the financing question over the summer and fall.
Spencer Putnam is the executive director of Vermont Businesses for Social Responsibility. Putnam says his organization strongly supported a bill passed by the House – a plan that separates insurance coverage from a person’s place of employment. But he says the Senate’s approach is a reasonable short term solution.
(Putnam) “Particularly if the principle is preserved that it’s not too burdensome on low income people. The early proposals of the payroll tax did exempt people that are at the lower end of the income scale. So that we approve of.”
(Kinzel) House and Senate negotiators are hoping to reach agreement on a compromise bill in the next day or two. If it contains any form of payroll tax the governor has vowed to veto it.
It appears that there are enough votes in the Senate to override a veto but the outcome in the House is far less certain.
For Vermont Public Radio, I’m Bob Kinzel in Montpelier.
We have this clarification to our story this morning on the opposition of several business groups to Governor Douglas’s plan to tax all health insurance premiums. While all three groups oppose the premium tax, they have very different views on a proposed payroll tax. The Vermont Chamber of Commerce opposes it, the Vermont Business Roundtable is neutral about the tax and Vermont Businesses for Social Responsibility supports the option.