Legislative Update- April 17, 2023
Sunday, April 16, 2023
by: Matt Musgrave

Section: AGC/VT News

paid leave form
As we hit the third week in April its clear that time is running short with only 2-3 weeks left of normal committee meetings prior to the end of year floor sessions that will ultimately decide the fate of most bills. The housing bill S.100 known as the HOME Act (Housing Opportunities Made for Everyone) has not been received in House Energy and Environment and as expected will look much different if it proceeds out of the committee which will be a disappointment for many. Another upset is on the way and it’s the tale of two slightly opposing priorities: childcare and paid family/medical leave.

We were all made aware of the priorities before the session even began knowing the Senate had its eyes on a childcare program to provide benefits to Vermonters to pay no more that 10% of their income for care and that providers would be subsidized with well-paying jobs although funding mechanisms were left from the discussion. We also were aware that the Houses main priority was a 100% wage replacement 12-week paid leave program funded by a payroll tax that would widely expand eligibility beyond family and medical reasons. But we all knew that the capacity to fund these programs both estimated at $100-300 million per year might not be feasible given Vermonter’s taxing capacity post pandemic.

The House with full intention passed their paid family and medical leave program much the same as the original authors intended. The bill allows employees who qualify to take 12 weeks of paid leave which will be funded by a state-run insurance program funded by a .55% payroll tax which is split between employer and employee. The bill H.66 took broad testimony from proponents, opponents and those that suggested tweaks to the bill including eligibility such as AGC/VTs recommends on layoff periods. Not much was changed, and it was passed out of the House and now sits in Senate Economic Development and Housing committee where it has received a walkthrough and limited testimony possibly signaling it may conflict with the Senates priorities.

Meanwhile, Senate bill S.56 has been assigned to the House Committee on Human Services which has the bill scheduled for testimony for 100% of their week. The Senate bill is somewhat disappointing to proponents and original sponsors of the bill but appears to be the best of both proposals so far. The bill was originally expected to provide the 10% max out of pocket for childcare benefit and subsidies for the providers. The bill instead was introduced with two elements, one which provided more funding and eligibility to the CCFA (Child Care Financial Assistance Program) and reduced the age of preschool to 4 years old. Since then, veteran Senate Appropriations Chair, Jane Kitchel understood that taxing capacity of Vermonters is challenging now and amended the bill significantly. The “Kitchel Amendment” as its known removed the preschool age reduction, kept the CCFAP funding and added a 12-week paid parental leave program. The program would include much lower wage replacement at 70% or the average Vermont weekly pay as the max and only one parent would be eligible for bonding leave. Both the childcare and leave program would be funded by a .42% employer/employee payroll tax, canceling the Vermont Child Tax Credit passed last year, and re appropriating some general funds costing a total of approximately $180 million per year.

We will see what happens in negotiation but its clear that the Senates bill encapsulates much of the priorities of both chambers of the State House but the House may be disappointed with S.56 and ask for more eligibility under the paid leave program. Some lobbyists in the building question whether this negotiation will be complete this year or need another whole session on these hot topics.