What’s An “Undue Financial Hardship”?

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The fate of the smoking ban in Maryland was still up in
the air this week, although all indicators are the differences between the
House version and Senate counterpart will be hashed out prior to the session’s
expiration next week.

One of the sticking points revolves around an “undue
financial hardship” clause and who should determine the merits of the
individual cases. There’s another issue as to whether service organizations,
such as the American Legion and VFW, should be exempted from the law.

If the state is going to pass a smoking ban, it needs to
have some teeth in it and not include exceptions. Compromise is a good thing,
but the smoking ban is either a public health issue or it’s not. It needs to
include everyone or nobody, and veteran’s organizations should not be exempt
and there should not be an “undue financial hardship” clause.

The two chambers disagree on whether it should be the
state health department and the comptroller, as the House sees it, or the
county health department, which the Senate likes. We say it should be neither
because the clause should not exist.

The whole “hardship” argument is absurd. There’s no
guarantee in business. A profit is not a given for any operation. Any
successful bar and restaurant operator will report keys to staying profitable
and afloat is adapting, keeping your product fresh and hiring capable staff.
There are so many given variables to operating a business.

Apparently, under this part of the smoking ban bill, a
business can seek hardship compensation if it experiences a decline in revenue
directly attributable to the prohibition of smoking in Maryland. This should be
interesting. We predict numerous businesses will be applying for this hardship
waiver after the first year of the ban, but there will need to be tools
available to whoever is the ultimate decision maker to determine whether the
loss of revenue was truly a result of the smoking ban or dependent on numerous
other factors, such as, and not limited to, competition, bad management,
weather and increased costs of business.

How that hardship will be defined is unknown, but one
thing is certain – the smoking ban will have this clause in it. The wording
will likely be debated in the closing days of the General Assembly session, but
there will be a hardship waiver included in the legislation.

With
that appearing to be a certainty, our view is the health department should not
be involved. Yes, the smoking ban is a public health issue, but determining the
financial impact through economic factors is independent of the health issue.
If the legislature is going to pass a smoking ban with a hardship clause, the
Comptroller’s Office is best to determine the individual case’s merits because
it’s the numbers that will be subject to interpretation. 

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