A state Senate committee yesterday moved cautiously on legislation that would decrease the unemployment insurance surtax on businesses and increase benefits to the jobless.
By a 10-1 vote, the Senate Finance Committee approved a bill to decrease the tax from 1.7 percent of wages to 1.2 percent and raise the weekly benefits paid to the unemployed from $223 to $250.
The House of Delegates last week approved a more liberal approach to the program, decreasing the tax to 0.9 percent and raising the benefit to $265.
Before voting, the senators concluded that it would be wiser to be prudent with the state's $400 million Unemployment Insurance Trust Fund, which was depleted by the recession four years ago. If Maryland's slow economic recovery continues, the legislature can always tinker with the issue when it is taken up again next year, said Sen. Thomas L. Bromwell, the committee's chairman.
"I think we should take a more conservative approach and look at this next year or possibly the year after," Mr. Bromwell, a Baltimore County Democrat, told committee members.
"I'm not saying the House is wrong, but I'm saying a $42 increase in benefits and a 0.8 percent reduction [in the surtax] is a little bit too much."
The lone dissenting vote came from Sen. Larry Young, D-Baltimore, who wanted to increase the benefit above $250.
The trust fund has grown as the number of unemployed state residents has dwindled, giving legislators the politically attractive opportunity to both cut taxes and raise benefits.
The new tax and benefit levels would be in effect for one year under both the House and Senate versions of the bill.
The committee's version of the bill, assuming passage by the full Senate, probably will lead to a showdown with the House today or tomorrow.
As an emergency bill, it will require a three-fifths majority in both chambers.
House and Senate leaders hope to have the measure on Gov. Parris N. Glendening's desk later this week so that it can be signed into law immediately. That would give businesses a smaller surtax this quarter.
The Senate version of the bill would give Maryland businesses an estimated $70 million tax cut.
The House version would reduce unemployment insurance taxes by $112 million.