To override Governor Scott's veto by attaining 100 votes. This would establish a new payroll tax on employees ($30 million annually) in order to fund a government-mandated Paid Family Leave program allowing employees to take up to 12 weeks of paid leave for the birth of a child, or 8 weeks for family care..Analysis:
This vote would establish a government-mandated insurance program. The program would be funded by a new employee payroll tax of 0.2%, on income up to $137,000. Employees can elect to pay an additional 0.38% of their wages to obtain medical leave of 6 weeks maximum..
While all Vermont employees would have their wages taxed, only employees who work at least 675 hours annually (13 hours a week) for a single employer would be eligible to receive the paid leave or to opt-in to the medical leave. A Vermont wage earner making the median income ($50k/year) would be taxed an additional $100 annually. Employers would have the option to pay some or all of the employee’s 0.2% wage tax..
JFO analysis indicates that employees who use the benefit would receive 90% of their weekly wages that are at or below the $13.26/hr Vermont Average Weekly Wage ($27,582/yr). They would get an additional 55% of their weekly wages that exceed the VAWW. For example, a worker making $20/hr ($41,601/yr) who uses the benefit would receive $625 weekly ($477 for their income qualifying as VAWW, plus $148). The maximum benefit would be capped at $1,334 per week..
In 2022, Vermonters are estimated to be taxed $30 million to pay for $25 million to Vermonters opting for birth and family leave according to Joint Fiscal Office analysis. In 2023, Vermonters are projected to pay less into the program than is needed to cover the cost: $30.8 million in taxes to fund $30.4 million in benefits, a 1.3% shortfall. The underfunding is projected to continue..
So, we can expect the tax (0.2%) and the price (0.38%) to increase in the future, with no hard cap set..
Those voting YES believe this program is a desirable benefit that will help retain and attract young families to Vermont. They argue the program must be mandatory or a lack of voluntary participation will drive up premium costs for those who do choose to enter the program. They believe Vermonters who would turn down coverage are too optimistic about their chances to never need coverage. The Legislature needs to override their lapse in judgement and force them to receive what’s in their best interest.
Those voting NO believe Vermont cannot afford another tax/entitlement program. Many of these “no” votes favor a bill for creating a program that would give Vermonters the option of paying into a program in order to obtain coverage. They may also fear the tax rates will have to rise to continue coverage.
.House Journal, Wednesday, February 6th, 2020
. "Pursuant to Chapter 2, Section 11, of the Vermont Constitution the Clerk proceeded to call the roll and the question, Shall the bill pass the failure of the Governor to approve notwithstanding? was decided in the negative. Yeas, 99. Nays, 51. A two thirds vote of 100 required…” (Read the Journal, p. 239-242) .Related:
Roll Call! House Passes Payroll Tax to Fund Paid Family Leave, 2020, initial vote before override
JFO Analysis (Jan 2020) Roll Call! Senate Passes Payroll Tax to Fund Paid Family Leave, 2020