NH Governor Vetoes Paid Family Leave, Calls It An ‘Income Tax’

CONCORD, NH — Gov. Chris Sununu, R-NH, has vetoed a paid family and medical leave insurance plan that he said would establish an income tax in the state of New Hampshire. SB1, a bill that was approved in both the Democratically-controlled House and Senate, would force employers in the Granite State to provide a private paid family and medical leave insurance plan or withdraw 0.5 percent of an employee’s wages to pay for a plan created by the state. The leave could be used by workers for the birth of a child, addressing a serious health condition of a family member, or the care of a member of the armed forces during foreign service with a serious injury or illness.

Sununu called the plan “an income tax that neither I nor the people of New Hampshire will ever support” and added that he had proposed a paid family medical leave plan with the governor of Vermont “that will work – one that is voluntary, affordable and income tax free.”

Business leaders, like Jim Roche, the president of BIA, and GOP leaders like Senate Leader Chuck Morse, R-Salem and state Rep. Dick Hinch, R-Merrimack, heralded the veto saying the proposal would end the New Hampshire Advantage and promote reckless taxation policies.

“It is unacceptable for the government to get in between a business and their employee by mandating which benefits they offer,” Morse said.

Hinch added, “Whether you support the concept of paid family leave or not, SB1 is a poorly constructed bill that sets us up for failure.”

“Companies (or potentially individual employees) would have been forced to pay for this benefit, even if they never asked for it or used it,” Roche agreed. “It would be especially burdensome for small businesses. New Hampshire employers know what benefit packages are best for their employees.”

The proposal would have started collecting the 0.5 percent in wages from employees or enforce businesses to provide employer plans on Jan. 1, 2020. A state program would be administered by the Department of Employment Security and was expected to raise around $157 million from private employers and $1.4 million from state government employers.

Employees would be limited to 12 weeks of coverage for any one application period and would be worth 60 percent of the employee’s average wage but not less than $125 per week and not higher than 85 percent of the weekly New Hampshire wage.

Employees would need to pay into the system for at least six months and would need to have worked for wages in the amount of at least 1,040 times the minimum wage to be eligible for benefit.

State Sen. Dan Feltes, D-Concord, posted a statement on Twitter saying that the veto was one of the reasons that people don’t like politics.

“Politicians, regardless of their last name or where they come from, should actually work for the people, should keep their campaign promises, and should tell the truth,” he wrote. “Governor Sununu has done none of that on paid family and medical leave, and he’s left working families and small businesses to fall further and further behind.”

A state-run paid family and medical leave insurance plan is one of the Democrat’s top legislative initiatives for this year. The plan is popular with the public, according to a poll from UNH from earlier this month.

Sununu came under fire last year for misspeaking at a forum and using the words “four weeks of vacation” to describe the time that the leave would allow, attempting to make the point that a 0.5 percent payroll tax would not be enough to give people multiple months of leave.