New Employee Benefit Attractive, Unaffordable
How can something that on the surface sounds beneficial to workers actually really be harmful to them and the state? If the experience of Washington State is any guide, there are at least 100 million reasons why.
HB 6932 is a new workplace mandate creating paid family and medical leave in Connecticut.
It requires deductions from employees’ paychecks to fund the leave for up to three months each year, at 100% of their pay (in businesses with two or more employees).
Other costs, says the legislature’s nonpartisan budget office, include at least $23 million over the next few years for the state to run the new program—costs that taxpayers will have to bear.
But that’s probably a drop in the bucket compared to the real impact this bill would have on Connecticut’s economy.
The idea is similar in structure and benefits to a mandate that Washington State passed but stopped short of fully enacting several years ago.
And here’s why they stopped: Because they found out what the paid FMLA program would really cost. See the image above–a portion of the fiscal note from Washington State’s version of the law.
Notice that when the program was to be fully implemented in the 2017-2019 fiscal years, it would have pulled nearly $1.4 billion out of Washington’s economy, with the state then projected to pay almost $1.2 billion of that sum back to program participants.
And that would have meant more than $200 million to be held by the state for administering the new paid family leave mandate.
Ultimately, they wisely decided not to go ahead with the program.
Out of economy
Even if you consider that Connecticut has about half of the working population than Washington State, and ignore inflation, the implication is staggering.
In Connecticut, HB 6932, when fully implemented, would likely pull nearly three quarters of a billion dollars every two years out of Connecticut's economy to be held onto by the state.
It also means that the $23 million dollar fiscal note is probably going to be more like $100 million per biennium once the program is up and running.
Connecticut taxpayers don't need another $100 million dollar (or more) mandate. And that’s why lawmakers should reject HB 6932.
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