Building an Economy that Works for Everyone

The doctor will see you now.

This “doctor’s examination” of assertions by the Association of Washington Business about Family Leave Insurance continues from Part 1.

Next comes the abdomen – lots of twists and turns here, so hang on:

Currently, the two funding options that have been proposed are to draw from the state’s general fund or to charge a payroll tax on workers.

Close, but missing some important details.

The Family Leave Insurance bill proposed in 2007 would have covered an ailing parent as well as a child, paying for all benefits with a 2-cent-an-hour tax on employees’ pay. The AWB spoke out strongly against that bill, and in the end, the bill was stripped of its funding source.

Fast-forward to this legislative session, and the AWB’s apparent concern about funding sources is “the longer the issue is unresolved the more attractive taxing businesses might be”. Ironic, no?

The legislative proposal under active consideration is to use the general fund for start-up costs. That idea is based on recommendations from the Joint Legislative Task Force on Family Leave that met last fall – recommendations supported by business representatives serving on that very task force.

The long-term funding picture does need to be sorted out, but so far at least, the “go a step at a time and do it right” approach is working: The task force has found millions of dollars in savings to taxpayers, and the Employment Security Department (which will administer the program) has plenty of time to get things up and running.

Policymakers also have time to put together a clear (thoughtful, creative, pragmatic) plan for long-term financing of the program in time for the 2009 legislative session.

Time to look at the legs:

Proponents of the law…are reluctant to allow employers to opt out, because they say too much potential revenue will be lost if that happens.

Very puzzling symptoms here. Family Leave Insurance is currently being funded from the state’s general fund, so there is really no revenue to “lose” in that sense. But allowing companies to opt out would definitely be a loss for working families no longer covered by Family Leave Insurance.

Nothing in the current Family Leave Insurance law prohibits any employer from offering more generous benefits if they so desire. Family Leave Insurance simply guarantees a minimum amount of paid family leave to Washington workers, much as our minimum wage guarantees a floor on wages.

And with that, our examination is complete.

But before the patient leaves, let’s take a look at the medical and other benefits of paid family leave:

  • For children and families: Reduced infant mortality and healthier children.
  • For business: Lower turnover and training costs, reduced absenteeism, and higher productivity, loyalty, and morale.
  • For taxpayers, communities and schools: Lower health care costs, reduced burdens on social services, and improved academic outcomes for children.

Now that sounds like a good prescription for our state.

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