Lawmakers have time to fix feel-good, do-nothing legislation
February 2008
After several failed attempts, state legislators finally succeeded last year in passing a feel-good paid family leave entitlement program. But once the good feelings of passing such a program passed, there was just one problem: how to pay for it.
Obviously, paid family leave was a contentious issue between proponents and those in the business community. The program gives beneficiaries up to $250 per week for five weeks to care for the birth or adoption of a child. The program as introduced would have covered employees taking paid leave to care for ailing family members, but that version could not get adequate support, so the eligibility was pared back.
There has been much written about the supposed merits of such an entitlement. Proponents of the plan claim that it will help nurture the future education of the child; promotes bonding between child and parent; even increase scholastic test scores. Opponents point out that most private companies provide some sort of paid leave already; that the program wreaks havoc on small businesses and the self-employed; and that the last thing our state needs is another expensive state-run inefficient bureaucracy.
Unfortunately, there still exist several important questions regarding funding and the administration of the new program. Essentially, policymakers passed an entitlement program with no way to pay for it – not exactly the soundest of public policy moves. That’s similar to living on a shoestring budget, buying luxury goods to make yourself feel better, and telling yourself you’ll figure out how to pay for your splurging at a later date.
The legislation appointed a committee to try and figure out how to pay for the program—the benefits kick in on October 1st of 2009—and recommend what state agency should provide the service. But the committee punted and failed to definitively decide how to pay for it.
In fact, during the task force hearings it became devastatingly clear that not one of the state agencies considered thought it could set up and implement the program in the timeline stipulated by the legislation—nor were the agencies comfortable with any expansion of the project—something proponents of the benefits are already talking about.
But how do we pay for the benefits? That’s another sticking point. Interestingly, some legislators are now saying that only a one-cent per hour payroll tax on every worker will pay for the program. But every previous funding proposal was geared towards a two-cent per hour per worker payroll tax. And, according to two of the agencies considered to run the system, any premium collection program would have great difficulty being set up in time for the benefits to kick in.
One issue they did agree on was that the general state fund should be tapped for the approximately $10 million cost of setting up the program and administering the first two years worth of benefits. But the program is supposed to cost around $40 million (benefit costs plus administration) per year by the end of this decade. The Governor has said the people must approve any payroll tax. But will voters go for it?
So, let’s review. We have a new and expensive state entitlement program but no way to pay for the administration or benefits past the first two years, no opt-out for small businesses, no political will to implement a new payroll tax, and no one knows yet just how the paid family leave program will impact other complex government programs like unemployment insurance that rate businesses on their past employment history (another committee will report on any of those ramifications in three years).
Washington workers currently benefit from five different types of leave policies, such as the state’s Family Leave Law, the federal Family and Medical Leave Act, the state Maternity Disability Regulation and others. There is no shortage of laws that are designed to help families bond with newborns or aid sick family members.
Given all these problems you would think some serious second thoughts would be floating around the halls of Olympia. But you would be wrong. Lawmakers who voted for the legislation still feel good about doing it—and I guess good feelings are what count for sound public policy nowadays.