10 February 2020 Vermont governor vetoes bill for mandatory paid family and medical insurance On January 31, 2020, Vermont Gov. Phil Scott (R) vetoed legislation under H. 107 that would have established a state-run paid family and medical leave insurance program funded by a 0.20% tax on employees' wages. In his veto message, Governor Scott explained that he objected to making the state less affordable to Vermont workers and more difficult for employers to employ them. For years, Vermonters have made it clear they don't want, nor can they afford, new broad-based taxes. We cannot continue to make the state less affordable for working Vermonters and more difficult for employers to employ them - even for well-intentioned programs like this one. Vermonters can't afford for us to get this wrong, especially at their expense. In lieu of a compulsory program, Governor Scott is advocating for a voluntary paid family and medical insurance plan that would be an expansion of an existing agreement with the Vermont State Employees Union to provide 8,500 Vermont state employees with a paid family and medical leave benefit. The Governor has requested proposals for insurance companies to bid on covering state employees as of July 1, 2020. The successful bidder will also be required to make the coverage available for Vermont employers and individuals at a rate comparable to the state's rate. The Governor expects that the voluntary program could be available within a year and does not rule out a mandatory program sometime in the future if necessary. This approach gives the state flexibility, and we could always add to it, or even make it mandatory in the future if deemed necessary. But we'll have a stronger foundation and tested administrative structure to build on. I truly believe this is an approach that will make this important benefit available to Vermonters more uickly and is a more economically and fiscally responsible — lower cost — path to getting where the Legislature proposes to go in H.107. Importantly, it doesn't require a $29 million payroll tax that we all know could grow. For information on states that currently have a compulsory state fund for paid family and medical leave insurance, see our annual employment tax rates and limits report.
Document ID: 2020-0332 | |||||||||
