Jen Kimmich: Scott is out of touch with the needs of small business
Governor Phil Scott's letter explaining his veto of the paid family leave bill showed Vermonters just how out of touch he is with the needs of small businesses and working families. The statewide paid family leave program, as proposed in H.196, would create a universal, portable benefit for working Vermonters at a minimal cost, leveling the playing field for our small businesses and allowing them to better compete with larger corporations.
Small businesses are a vital part of Vermont's economy. Roughly 90 percent of our state's businesses have fewer than 20 employees and these are the businesses that are least likely to be able to offer paid family leave on their own. A statewide family leave insurance program would make it possible for all Vermont employers, regardless of their size, to ensure their employees can be successful providing for and caring for their families.
In his letter, Governor Scott noted that he would support a voluntary paid family leave program and stated that the legislature refused to pursue this avenue. However, over the past biennium, as the legislature discussed the possibility of a statewide paid family leave program, they explored the concept of a voluntary program and found it to be unfeasible. Research determined that — as with any insurance program — the costs of a voluntary program would be significantly higher than the costs of a universal program.
Researchers in New Hampshire who modeled the concept of a voluntary paid family leave program testified to this in the House. Their research found that voluntary social insurance programs are generally unsustainable and lead to higher premiums for those who do opt in. Insurance programs, like health insurance, need a balanced risk pool to be sustainable. The legislature did its due diligence in exploring this concept and chose to pass a bill that would create a sustainable program, providing a robust benefit to all Vermonters at minimal cost.
The governor's veto letter on the paid family leave bill also alleged that the projected startup costs for the program, as outlined in a fiscal note prepared by the Joint Fiscal Office, were insufficient and that the cost of the program would continue to rise over time — but that is far from the truth.
Leading up to the 2017 legislative session, as part of a USDOL-funded study, an independent research organization conducted extensive modeling to estimate the costs of a paid family leave program in Vermont. The model, which was used to calculate the program costs as outlined in Vermont's legislation, is considered the gold standard in the country and has been used by several other states that have implemented paid family leave programs.
Over this past biennium, the non-partisan Joint Fiscal Office (JFO) extensively studied the funding model for paid family leave and adjusted the costs of the program to ensure that the fund would maintain solvency and viability with the benefit levels as outlined in the legislation. The Scott Administration's repeat disregard for the Joint Fiscal Office's analyses is disappointing and concerning.
A statewide paid family leave insurance program is an effective recruitment and retainment tool for local, small businesses that are struggling to find ways to compete with larger corporations. This is also a great recruitment tool for the state of Vermont, and has the potential to help make Vermont more appealing to the young professionals and businesses we are trying to attract and retain.
Throughout the governor's veto letter, he expressed his commitment to growing Vermont's economy, attracting new workers to Vermont, and making workforce development a priority. The governor's actions on the paid family leave bill stand in clear defiance of those words and demonstrate his lack of commitment to meeting the needs of Vermont workers and small businesses.
Jen Kimmich is board chair of Main Street Alliance of Vermont, a statewide small business organization. She is also co-founder of The Alchemist.
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