Friends and neighbors,
Republicans strongly support expanding access to paid family leave benefits. Giving workers paid time off to bond with a new baby or care for a loved one is a crucial step towards ensuring families can support each other during important life events without adding additional financial stress.
However, the two parties have very different approaches to this issue, and unfortunately we are now getting a sense of why the state-managed approach that Democrats took this year will do more harm than good.
An independent study commissioned by Minnesota’s Department of Employment and Economic Development (DEED) found that it will cost taxpayers $628 million more than Democrats suggested. The tax increase needed to pay for the program will be 31% higher in the second year. The total cost of the program for the first three years is more than $4 BILLION.
In other words, it will be dramatically more expensive than advertised.
This is what I wrote about the Democrats’ paid leave proposal back in May. Note the last sentence:
Their bill burdens businesses with an expensive new mandate that will be especially hard on small businesses. Their bill spends hundreds of millions of dollars to create a massive new government bureaucracy. Their bill levies a new payroll tax that will take over a billion dollars out of the pockets of Minnesota employers and employees every year. Their bill will require the state to hire more than 400 additional FTEs. And if their predictions turn out to be off, taxpayers will likely be forced to make up the additional costs to keep the program solvent.
The nonpartisan think tank Center of the American Experiment has written extensively about this as well, noting just before passage: “Minnesota is about to enact a major piece of legislation which will transform the state’s economy without any real notion of what it will cost. We are flying blind.”
In other words, this situation is exactly what many of us warned of when the bill was being discussed last session. The math simply did not add up. We were sold a false bill of goods, and only now are we getting a clearer picture of how much it’s going to cost taxpayers.
This is why I supported an alternative proposal that would have expanded access to paid leave without crushing workers and small businesses.
Our plan is a free-market approach to the issue of paid leave. Instead of establishing a large government bureaucracy, we propose creating an insurance product specifically designed for paid family leave. A private sector paid family leave program can start right away and, most importantly, be tailored to fit the specific requirements of each business and its employees – a sharp contrast to a one-size-fits-all government-run program.
That is important because many companies already offer generous paid leave for their employees. The nature of the Democrats’ paid leave program mandate is many employees will lose access to benefits they already enjoy, even if those benefits are better than what the government program offers.
Like you, I’m all for giving people better access to paid family and medical leave. But the Democrats’ approach to this issue misses the mark. We have a responsibility to do this more smartly, so workers can benefit without the harm to employees and small businesses. It is not necessary to establish a bulky new government bureaucracy or enforce stringent regulations on businesses, and it is certainly not necessary to raise taxes.
There is a far better way to expand the net of paid leave without putting too much pressure on our workforce who pay the taxes. That is what the Republican alternative would have accomplished.
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