Roundhouse in Santa Fe. Post file photo
By Daniel J. Chacón
The Santa Fe New Mexican
Members of the powerful Senate Finance Committee raised several issues Wednesday about a controversial paid leave proposal that would affect most employers in New Mexico, expressing concerns about startup costs and an unidentified revenue stream for a key provision that would cost upwards of $193.5 million a year.
With just a week and a half left in the legislative session to pass House Bill 11 — which proponents laud as a boon to New Mexico workers that’s been years in the making and opponents slam as a hefty tax increase — lawmakers on the committee requested detailed case studies on business impacts and comparative analyses of similar paid family and medical leave programs in other states.
The Wednesday meeting was meant to provide lawmakers with an analysis of the measure, rather than a presentation by the bill’s sponsors, a move that drew some criticism and speculation it was an effort to pan the bill without advocates there to defend it.
“I don’t think I’ve ever seen a time where a bill was put on [the agenda] without the sponsor, and it’s all incredibly unfair,” Sen. Jeff Steinborn, D-Las Cruces said.
“It’s almost like an opportunity to trash the bill,” he said. “I know the sponsors of the bill are really not happy with this process, and I don’t blame them one bit.”
Rep. Christine Chandler, D-Los Alamos, one of the sponsors of HB 11, called the analysis process “unusual.”
“The nicest thing I can say is curious,” she added.
“If there’s interest in learning about the foundation of the bill and kind of the rationale and the whole scope … I would have expected that we would have been called to participate in the discussion,” Chandler said.
Sen. George Muñoz, a Gallup Democrat who chairs the committee, downplayed the decision to discuss the bill without its sponsors present. He had expected House Speaker Javier Martínez, D-Albuquerque, to “send some staff members over,” he said.
“I don’t know if they were in the room or not,” Muñoz said. “It wasn’t a bill hearing. It wasn’t anything against or for.”
Costs and benefits
The proposal, which started the 60-day session as the Paid Family and Medical Leave Act, has been rebranded — and reconfigured — as the Welcome Child and Family Wellness Leave Act.
A similar measure started in the Senate last year but narrowly failed to pass the House — the closest the state has come to a program providing funds for extended paid time off for certain circumstances, including medical treatment, a new baby or to care for a sick relative.
The bill would apply to all public and private employers in the state except federal employers. The Department of Workforce Solutions, which would administer the program, would be authorized to grant waivers to employers who have a benefits plan substantially similar or greater than the benefits outlined in the measure.
The proposal includes family wellness leave that covers up to six weeks of paid leave per year, starting Jan. 1, 2028.
“The amount of weekly family wellness leave would be the state’s minimum wage, plus 67% of the employee’s average weekly wages above minimum wage, capped at the state’s annual mean wage, so the annual average wage,” John Kreienkamp, a Legislative Finance Committee analyst, told the Senate Finance Committee.
That component of the bill would include medical leave for an applicant to care for themselves or a family member with a serious health condition; leave pertaining to a family member’s military service; so-called safe leave granted to an applicant who is experiencing domestic violence, or sexual assault or abuse; bereavement leave for the death of a child younger than 18; and foster leave for a family welcoming a foster child into their home.
The second component of the bill would be the welcome child benefit, which would pay new parents $3,000 a month for up to three months, or $9,000 total, to take time off to care for and bond with a newborn or just-adopted child.
Employers and employees would both contribute premiums to pay for family wellness leave, with workers chipping in the equivalent of 0.2% of their earnings while employers would add in 0.15% of each eligible worker’s wages — significantly lower than the premiums of 0.5% and 0.4% for workers and employers, respectively, in versions of the bill proposed previously.
Businesses with fewer than five employees would be exempt from having to pay into the fund.
Solvency questions
HB 11 would create a Family Wellness Leave Fund and a Welcome Child Fund, both of which have drawn questions and concerns.
“The largest source of issues with respect to the Family Wellness Leave Fund … is going to be essentially the solvency of the fund,” Kreienkamp told lawmakers. “The LFC analysis indicates that that’s really going to depend a lot on the uptake rate, meaning how many employees are actually using the family leave, and the LFC states that those uptake rates are extremely difficult to predict.”
Chandler said she was “comfortable that we have a strong foundation” to support the Family Wellness Leave Fund.
Kreienkamp said the “biggest issue” with the welcome child benefit is “the bill doesn’t specify a source of funding.”
With about 21,500 babies born in New Mexico annually and a $9,000 rebate per child, Kreienkamp estimated the total potential cost at $193.5 million.
“That benefit is probably going to depend on legislative appropriations in the future, presumably from the general fund,” he said. “There is a question as to whether or not the Early Childhood Education and Care Fund might be available for that.”
Sen. Michael Padilla, D-Albuquerque, took issue with the prospect of dipping into the early child trust fund, which was part of his years-long effort to create a revenue stream for preschool and other programs for New Mexico’s youngest children.
“That’s kind of my baby, no pun intended,” he said. “I’m very concerned about this.”
Kreienkamp said tapping into the trust fund wasn’t suggested in any analysis of the bill, but he reviewed it as a possible source.
“I don’t think I’ve ever seen us do something where it’s not paid for when we put it on the books because then we’re sort of on the hook and we have to do it because it’s the law,” he said.
Chandler said the Welcome Child Fund would be “funded through the appropriation process.”
“Many programs don’t have a … dedicated revenue stream,” she said. “That’s what legislators do. They appropriate funds.”
But Sen. Nicole Tobiassen, R-Albuquerque, questioned the source of funding. “Where are we magically growing this money tree for pay for all of this?” she asked. “I’m concerned because we certainly do not have room currently in the budget.”
Asked whether she was concerned the questions raised Wednesday signaled her proposal was in trouble, Chandler brushed it off as part of the legislative process.
“At this point in the session, there are things like this that pop up, and they’re resolved,” she said. “This is not unusual. … I’m expecting that there are going to be these little blips in the road. That’s the nature of this process.”
Paul Gessing, president of the Albuquerque-based Rio Grande Foundation, said feedback from the Senate Finance Committee revealed the bill needs more vetting.
“It is high time that someone in the Legislature took a closer look at HB 11, especially considering the massive changes made to it along the way,” he said.
“The Senate Finance Committee is a likely and logical place to have a detailed vetting of this complicated proposal and its solvency,” he said. “I believe they will agree with us that the latest iteration of HB 11 needs a lot of work.”