The House’s tax-writing committee passed a scaled-back version of a paid family leave insurance bill in a 7-4 vote Thursday
The House Ways and Means Committee endorsed H.196 after defeating an amendment to study the issue and significantly scaling back the original proposal the House General, Housing and Military Affairs Committee passed in March.
That version would have provided eligible workers with 12 weeks a year of paid parental, family or disability leave. All Vermont workers would have paid a 0.93 percent payroll tax to fund the program.
Workers would have made claims under the program to the Department of Labor, which would collect the taxes and administer the program similarly to unemployment insurance. That version of the bill would have reimbursed workers 100 percent of their wages, up to the equivalent of about $52,000 a year, for the 12-week leave period.
The new bill would provide six weeks of parental or family leave — not disability leave — and be funded through a 0.141 percent payroll tax on workers’ first $150,000 of wages. Employees would have only 80 percent of their wages replaced, not 100 percent.
The Department of Labor would still administer the program.
“We know it’s good for families,” Rep. Janet Ancel, D-Calais, the committee chair, said of paid family and parental leave. “We believe it’s good for business. We think it’s a good economic development strategy, frankly to support young families.”
“There are so many things about it that just make good policy sense, and the amount of revenue that we need to raise and the percentage of wages that people need to pay in to participate is really quite modest given the benefit,” Ancel said.
Ancel said the committee purposefully set aside the disability issue from the bill. She said House General’s bill would have confined use of the disability benefit to people who were seriously ill; she prefers to have a short-term disability benefit for people who are unable to perform their jobs.
“Some of us on the committee think there ought to be a stronger disability program, but that will just have to come separately,” Ancel said. “We don’t want you to be dying (to qualify for the benefit). We just want you to be unable to do your job.”
Rep. Cynthia Browning, D-Arlington, who often votes with Republicans, called the new version of the bill “vastly better” than House General’s proposal. She still voted against the new language.
“It’s a mandatory program,” Browning said. “A lot of people will pay into this, pay payroll taxes for years and never require it. I just really don’t think this is the right way to do it.”
She criticized the committee for not modeling how the state could fund parental leave in other ways, such as from an income tax or savings in another part of the state’s general fund.
She said if there are 6,000 babies born in the state every year, the state could pay $2,000 to each new mother at a cost of just $12 million a year. “Those possibilities were never modeled,” she said. “They were never considered. The committee was always committed to a mandatory payroll tax.”
Rep. Kurt Wright, R-Burlington, said his issue is having people pay into the program who never need to use it. He said that while that’s the nature of any insurance program, he does not support it.
“I grew up in a low-income family … in a single-parent household, and I know that even in our circumstances, I know that my mother struggled every week to have enough money to put food on the table and everything else,” Wright said.
“While I’m sympathetic to people needing that benefit, I’m also sympathetic to taking money out of people’s pockets,” Wright said. “I’d like to have it be optional or at least opt-out for people so people can actually make their own decision.”
H.196 is not on track to become law this year. If the bill gets out of the House, it will go over to the Senate, which could decide whether to take it up in 2018.
H.196 will go to the House Appropriations Committee before moving to the House floor for a full vote.