Taxes on food and cigarettes, health care costs and organized retail theft are some of the hot-button issues being debated in state legislatures this year.
In addition to the "fair share" health care legislation that passed in Maryland already this year (see Page 4), several other states also are expected to see similar introductions in their legislature. Other key regulatory issues expected to be introduced in some of the most highly populated states follows.
In California, one of the biggest thorns in the side of retailers is a new Los Angeles ordinance, the Grocery Worker Retention Act, which requires grocery companies that purchase another grocery operator to retain the workers of the previous owners for 90 days.
California Grocers Association officials are concerned that the city ordinance will also be considered in the California State Legislature.
"It is very poorly worded, and would discourage people from investing in the city of Los Angeles. We want to make sure it does not make its way to Sacramento or any state legislature," said Peter Larkin, president of the CGA, Sacramento.
Also, while California passed Workers' Compensation Reform packages in 2003 and 2004 - which Larkin said have started to bring the state's workers' comp rates back in line with other states - he expects efforts in the state legislature to "undo those reforms."
"We will be opposing the efforts, and I'm sure the governor's office will do everything they can to protect the reforms," Larkin said.
CGA will also oppose efforts by local governments to take more control over alcohol beverage licensing, such as determining which retailers get licenses and the times liquor can be sold. "We will oppose those efforts, because we prefer to maintain a statewide system," Larkin said.
New York's Bottle Bill
The Food Industry Alliance of New York, Albany, is battling a bill in the New York State Assembly that proposes expanding the state's bottle law to include deposits on all non-carbonated beverages, such as water, iced tea, sports drinks and fruit drinks.
"We would be overwhelmed. We have all these city stores that don't have room to store those [bottles] today," said Michael Rosen, vice president of government relations, FIA.
Instead, the FIA is working on Bottle Law reform, which would do away with bottle redemption in grocery stores. "Professional redeemers scrounge through garbage bins and drag bags back. We have been urging those kind of redemptions not take place in a food store - it is unsanitary," Rosen said.
New York grocers are also battling organized retail theft of items such as infant formula. "We want to limit the outlets where stolen products can be sold, such as flea markets," Rosen said. The FIA's proposal on limiting outlets is pending in both the state House and Senate.
'Fair Share' in Florida
The Florida Retail Federation, Tallahassee, plans to battle a health care bill expected to be introduced soon in the state Legislature, which is similar to the recently passed health care bill in Maryland.
The Maryland legislation requires companies with more than 10,000 employees to spend at least 8% of their payroll on health benefits, or pay the balance into a state low-income health insurance fund.
"We will be opposing the bill and educating legislators that this is not the issue. We must get control of health care expenses, or we cannot provide that benefit," said Randy Miller, senior vice president of government affairs for the Florida Retail Federation.
The state's retailers are also concerned about a hurricane-preparedness ordinance proposed in Miami-Dade County, which would require all grocery stores over 40,000 square feet to purchase generators. While grocers do not oppose buying generators, legislation and regulation should be developed in cooperation with the state's power companies and legislators, according to the FRF.
"It's an idea that should not be mandated at a local level. We're going to figure out how to have a coordinated, reasonable approach at the state level," Miller said.
In addition, FRF plans to work with the Gov. Jeb Bush's office to expand the list of "hurricane holiday" products - items that retailers can sell tax-free during hurricane season. "We want to make the list broader, including wood and other items, and increase the value of generators [that can be tax-free]," Miller said.
Ohio Business Taxes
The Ohio Grocers Association, Columbus, plans to legally challenge the Commercial Activities Tax, which imposes a levy of 0.26% of every $1 in excess of $1 million of businesses' gross receipts, passed by the state General Assembly in the last session.
The OGA is taking its case to the Ohio Supreme Court, saying the law is a "hidden sales tax" on food products, which goes against the state's constitution, according to Jason Wetzel, vice president of government relations, OGA.
"This 'business activities tax' is, in essence, an excise tax and prohibited under Article XII of the Ohio Constitution," wrote Dave Daniel, chairman of the OGA board of directors in a letter urging support of its lawsuit.
The OGA is also battling a proposal to add a minimum-wage increase from $4.25 per hour to $6.15, then continue to increase it, to Ohio's November ballot.
"The minimum wage should be raised to the federal standard, but it is a bad idea to amend this into our Constitution," Wetzel said.
While OGA said the majority of the state's grocers already pay employees above the state's minimum wage, the association does not support giving the state the power to continue to raise the minimum wage. "If you go too far on minimum wage, you could end up tipping the economic boat, and increasing your state's inflation," Wetzel said.
CANDY Tax in PENNSYLVANIA
As in other states, grocers in Pennsylvania are fighting tax increases on products including candy and diapers. A bill in the state Senate would allow sales tax on diapers, candy, cosmetics and some business services, which have not been taxed in the past.
"In the current proposal, the sales tax would remain at 6%, but these items [candy, gum, etc.] that are currently not taxable, would become taxable," said Randy St. John, senior vice president of the Pennsylvania Food Merchants Association in Camp Hill.
The PFMA will also battle Pennsylvania Gov. Edward Rendell's proposal to hike the state's minimum wage from $5.15 per hour to $7.15 per hour. "We and the Chamber [of Commerce] are actively opposed to that. We hope the legislature would not let this happen," St. John said.
Funding Texas Education
To boost funding for education, the Texas Legislature has proposed special taxes on snacks, bottled water and other items, and suggested raising cigarette taxes to $1 per pack.
While the Legislature does not meet until a special session in April, the Texas Grocery & Convenience Association in Austin is already pushing for a broad-based, low-rate business tax across the board, rather than on specific products.
"We're getting wholesalers and retailers to appear at hearings and explain how these taxes affect us," said Joe Ratcliff, director of government relations, TGCA.
Mail Limits in Illinois
The Illinois Retail Merchants Association, Chicago, is fighting two bills introduced in the state General Assembly this month, including one that restricts what grocers can mail to their customers.
The Restricted Mailing Registry bill would prevent commercial mailings to residents, if their address is placed on a Restricted Mailing Registry, which would have to be created.
"As written, retailers would not be able to send notifications to people that a new store was about to open in their area," said Rob Karr, vice president of government and member relations, IRMA.
IRMA is also battling an amendment to the state's Human Rights Act, which would bar employers and housing officials from asking about individuals' prior felonies.