Cost of paid leave plan more than triple estimates, business lobby says
by Statehouse News ServiceJUNE 7, 2006 – The Senate's plan to expand paid leave options and tax deductions for workers with families would cost those workers more than triple what its designers predicted, the state's largest employers group said Wednesday. Instead of the average of less than $2 per week contribution laid out by sponsor and Senate President Robert Travaglini, workers would have to pony up between $6 and $12 per week, say critics who are hopeful the dwindling time left in this legislative session will help prevent the bill's passage.
Due for a public hearing Thursday on Beacon Hill, the legislation would rely on employee contributions to fund up to 12 weeks of paid, job-protected leave per year. Supporters call it the nation's most worker- and family-friendly proposal, intended to allow care for newborns or sick family members. But business lobbyists said the bill's authors failed to consider adequately the population who could see the options as a way to help care for aging parents. The "Sandwich Generation," adults with responsibility up and down the family tree, could find the leave particularly useful, the lobbyists said.
"I think [legislators'] focus was on new parents, and I think there will probably be significant take-up for ... the other excused absence, which would be caring for a relative," said Eileen McAnneny, vice president of Associated Industries of Massachusetts (A.I.M.).
Supported by organized labor, the legislation would absorb $70 million tax revenue by more than doubling the income tax deduction for expenses tied to child and dependent care, Travaglini said when he unveiled the plan in April. Another tax break for workers would come through an increased standard tax deduction for individuals with dependents who are disabled, under 12, or over 65.
To be eligible, workers would need to have logged nine months or 900 hours with the same company, and would not qualify for the benefits until after a full week of leave. Employees at companies employing fewer than 50 people would also qualify for federal protections that currently only apply to businesses employing 50 or more.
The provision that has drawn the most attention is the mandated employee contribution, which would provide the revenue stream for the 12 weeks of full-salaried leave, up to $750 per week. House Speaker Salvatore DiMasi last month questioned the plan's affordability for both workers and employers.
On the day he discussed the plan, Travaglini called details "obviously subject to change," saying, "[T]hese are arbitrary numbers that my staff and I just have arrived at."
Sen. Thomas McGee (D-Lynn), who co-chairs the Committee on Labor and Workforce Development, which will jointly hear the bill tomorrow with the Committee on Children and Families, said the committee planned "to be flexible."
"I think it does address a real need, whether you talk about Sandwich Generation, about maternity-paternity, it really does address the needs we as legislators hear from people," McGee said. A University of Massachusetts at Boston economist, Randy Albelda, said a new study, due for release Thursday, concludes there would be a net jump of just 6 percent in the number of leaves taken by the state's workers.
According to a copy of the report obtained by the News Service, the new plan would increase the average leave length by just a half day, and the total cost in lost wages, employer benefits, and program costs would jump 6.4 percent to $1.84 billion, compared to existing costs. The report predicts "non-white, younger, and less educated" workers from low-income households would benefit particularly. A.I.M. worries that the estimate of 184,000 leaves taken under the proposed program per year, calculated as a high-end estimate by Albelda and another professor at UMass-Boston, might be low. And, as the number of leaves climb, A.I.M. said, so would the cost of the mandatory employee contributions.
John Regan, another A.I.M vice president, said he had been conducting comparative analyses of the Massachusetts plan alongside similar efforts in California and Rhode Island, and found the weekly contribution is likely to spike well beyond the $2 outside estimate suggested by the Senate sponsors.
"I can get it up to 12 [dollars] without breaking a sweat," Regan said. But Albelda said the numbers had been in the works for five years. "If they want to spend five years working on a report based on an actual simulation model, that's fine," she said in a telephone interview.
At Thursday's noon session in Gardner Auditorium, A.I.M. hopes to have small business representatives speaking out against the bill. In addition to Travaglini, others scheduled to testify in favor include Steve Grossman, owner of MassEnvelope and former chairman of the Democratic National Committee, and Angela Menino, whose husband, Thomas, is mayor of Boston. Both Massachusetts AFL-CIO President Robert Haynes and John Bennett, president of the Massachusetts Senior Action Council, are also scheduled, according to McGee's office.
The Senate on Wednesday adopted an order extending the date when the committees considering the bill must decide to recommend its passage or defeat until June 28.
