Sen. Stephen S. Hershey Jr. (R-Upper Shore)said the state cannot afford a paid family leave program this year. (File photo by Bryan P. Sears/Maryland Matters)
After Republican leaders challenged other lawmakers to look high and low for programs to cut as the state faces a $3 billion budget shortfall, the Senate minority leader decided to take up the challenge.
His idea: Postpone the start date for another two years of an already-delayed program to provide paid family leave for Maryland workers.
The Family and Medical Leave Insurance (FAMLI) Program is supposed to start this summer. But Sen. Stephen S. Hershey Jr. (R-Upper Shore) said the state is not ready implement the program, which has struggled to get off the ground since legislation creating it passed in 2022. In that time, the estimated cost of the program has grown from about $800 million to $1.8 billion.
“It’s important, as we’re looking to the fiscal climate of the state right now,” Hershey said Wednesday. “This is the time to put a brief, two-year extension — delay the implementation of this, provide some relief to the state and their budget concerns, provide relief to businesses as they’re trying to grow and looking at a new tax climate as well.”
Hershey’s comments came during testimony Wednesday before the Senate Finance Committee on Senate Bill 355, his bill to delay the program for two years. There is currently no House version of the bill.
But supporters say the FAMLI program is needed by Maryland families and should not be delayed any longer.
“Marylanders cannot afford any more delays,” Lisa Klingenmaier, manager of the Time to Care Coalition, told the committee. “Approximately 160,000 Marylanders will apply for leave under this program in a year. So every year this program is delayed, 160,000 Marylanders are going without the paid leave that they need.”
The FAMLI law calls for creation of a fund that employers and some employees would contribute to. The fund would be used to grant workers up to 12 weeks of paid medical leave to handle significant medical situations that might require lengthy time away from work — such as nurturing a newborn, caring for a family member with a serious health condition or tending to one’s own major health needs.
Employers would have to contribute to the state FAMLI fund unless they provided an equivalent benefit for their employees.
The current law calls for employers, including the state, to begin collecting payroll deductions in July and providing the FAMLI benefit in 2026. Under Hershey’s bill, collections would begin in 2027 and benefits would start going out in 2028.
The program has already faced delays. The 2022 legislation establishing the fund, called the Time to Care Act, was initially vetoed by then-Gov. Larry Hogan (R), but quickly overridden by the General Assembly. It was supposed to start issuing benefits by January of this year, but that was postponed for a year by lawmakers.
Costs have grown in the meantime, according to state analysts. A fiscal note for the bill says the program was originally expected to cost the state $800 million, but that it is now expected to cost $1.8 billion to administer.
“Did we ever really know what this program is going to cost us? In 2022, they said it could be $800 million. In 2024, it was changed to $900 million,” Hershey said. “Now we’re seeing that it’s over $1.8 billion – and that’s because it’s taken so long to finally figure out what this program was going to entail, and how much it was going to affect the state of Maryland.”
He also said the program will drive new businesses away from the state at a time when Gov. Wes Moore has said the state needs to grow its economy to help close its budget shortfall.
“This is simply not the fiscal climate to impose a new tax on Maryland businesses,” Hershey said. “We heard the State of the State today. We heard the drive for economic development and trying to bring new businesses into the state of Maryland. This is not the type of policy that we need to move forward with if we’re trying to attract businesses.”
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But in testimony to the committee Wednesday, Lucy Zhou, attorney with the Public Justice Center, said the FAMLI program will help “alleviate the financial hardships that families face in life’s challenging and milestone moments.”
Zhou said she took advantage of paid family leave that her employer offered to take care of her newborn last year. Other workers should have the same opportunity, she said.
“It was a relief to be able to focus on my own health, and that of my newborn, without the stress of having to spend down all of my sick and vacation time,” she said. “Even though I feel lucky to have had access to paid parental leave, this critical right should not be a matter of luck.”