THE BARRAS REPORT: Universal Paid Leave-Part 2

January 9, 2017

THE BARRAS REPORT: WAITING FOR THE FAT LADY,

Universal Paid Leave Part 2

 

If the mayor of a city knows a bill passed by the legislature has the potential of bankrupting the government or is unfair to residents of her jurisdiction, it is her duty to veto that legislation, regardless of whether her action will be sustained or overridden.  Unfortunately, Mayor Muriel Bowser appears to have decided to take the wimp’s way out of the controversial surrounding the DC Council approved Universal Paid Leave Act (UPLA). She has said she will not sign the legislation.

 

What kind of leadership is that?

 

The UPLA as approved by the legislature during its final session of 2016 would cost as much as $246 million to implement and finance; it would be funded by a new tax against local businesses; and it would create a huge bureaucracy that city officials likely will have difficulty operating. Even more egregious, at least 66 percent of the recipients of the 16-week benefit would be residents of Maryland and Virginia—not the District of Columbia.

 

Further, what many people may not have realized is that the council has placed pressure on e on private sector businesses to provide a benefit that the government does not currently offer its own workers. And why is that you might ask? TBR was equally curious.

 

Chairman Phil Mendelson said in an interview with TRB that the legislature had had some discussion about expanding benefits to 16 weeks as provided by UPLA to city government workers. But Chief Financial Officer Jeffrey DeWitt “made clear if we touched it, he would assess the entire fiscal impact for the program.”  There are some city agencies that are having a difficult time providing leave benefits to its employees, which are far less that the 16 weeks allotted under the UPLA.

 

If DeWitt had issued a new fiscal impact statement, it could have been a double blow for the progressives pushing the national UPL agenda: It would have provided indisputable evidence that the council was underestimating the long-term financial impact of the program. After all, the city had approved its leave program years ago; now, however, money was running short. That fact foreshadows the future of the Universal Paid Leave Act. What happens if the city does not collect sufficient tax revenue from businesses to cover all employees? Will the District be able to fill the gap?

 

The answer to that question is likely no. Some political and fiscal observers have already concluded that states and cities will be burdened by President-elect Donald Trump’s administration and the Republican Congress that hasn’t seen an entitlement program it doesn’t want to cut. TBR has predicted that the federal government will renew its love affair with block grants, using that vehicle to relieve itself of responsibility for healthcare funding, welfare, and education, among other things. The upshot will be that local jurisdictions like the District will have to either come up with the money to cover any shortage or discontinue vital safety-net services.

 

Further, a new fiscal impact statement from the CFO may have meant the opposition would have had a stronger hammer to force UPLA’s death. It’s not too late to bury the program, although it was approved by the council, however.

 

Any legislator can offer an amendment to any existing law. During TBR’s interview with Mendelson, he said he would be opened to any proposal that would include a funding formula that would help small businesses. Ward 2’s Jack Evans and Ward 3’s Mary Cheh introduced a bill that would have mandated employers set up within their companies a 16- week paid leave program. Their proposal did not indicate how businesses were to establish the benefit.  However, it would have created an insurance pool from which small businesses could draw, if they were experiencing a hardship in providing such a benefit. Evans and Cheh though they had the support of five other council members including Ward 5’s Kenyan McDuffie(D) and At-large Anita Bonds(D). Government sources said the two legislators were persuaded to vote with the Chairman after a long closed door meeting with Mendelson during which their committee assignments were discussed.  Later that same day, the council voted down the Evans-Cheh alternative leave proposal.

 

“If [business leaders] want to change the law, they have to solve the problem with the small business community. I am open to reviewing the law, if they come to me with a plan for that,” said Mendelson.

The chairman might be open to tweaking the law, but are his members? At-large Council member Elissa Silverman (I) and David Grosso (I) have staked their reputations on its passage. Silverman is up for re-election and undoubtedly UPLA will be a big part of her list of accomplishments presented to the voters.

 

“She’s helped accomplish what do one in the nation has accomplished,” said Evans about Silverman, adding that now her profile is national—not just local or regional.

 

Every voter in the District should continue to ask council members, particularly Mendelson, Grosso and Silverman these questions: Why the hurry? Why pass a law that benefits mostly Maryland and Virginia residents? Why won’t they work with the private sector for a collaborative resolution of the problem? And how, in all good conscience, can the city demand the private sector provides something to its workers that the government isn’t providing to its employees?

 

 

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