No top-spot politician in a one-party town such as D.C. hopes to have to tear up a piece of legislation that lands on her desk.
That’s the decision Mayor Muriel Bowser must soon make.
Bowser has announced she will not attach her name to a controversial and ill-considered paid leave measure approved late last month by a fractured and split D.C. Council. She has two other options: Allow the bill to become law without her signature or veto it.
Mayor Bowser should veto the current draft of a D.C. paid leave law.
Whether the District will institute paid leave is not in question. What matters is whether the plan makes sense. The current bill doesn’t.
It would establish the most expansive and expensive program compared to only three states with such a law. A weekly wage replacement rate of 90 percent, up to a $1,000 maximum – contrasted to only 55 percent in both California and Rhode Island, and 66 percent in New Jersey – is extravagant and likely unsustainable at the business tax of 0.62 percent on wages paid. Compensated time off would be allowed for parental leave of eight weeks, family leave of six weeks, and medical leave of two weeks – also exceeding the states.
The city’s CFO has cautioned the current approach is tantamount to flying blind through unchartered airspace filled with exploding potential cost overruns.
D.C. would also become the sole jurisdiction funding a paid family leave program by employer tax instead of employee withholding. This annual business tax, erasing much of the modest tax cuts still not phased-in, totals a quarter-billion dollars per year at start-up.
The District is uniquely prohibited from taxing non-resident incomes. That anomaly has engendered a perverse precedent-setting push by labor unions, union-funded agitators, think-tank types and a tiny gaggle of political activists to utilize the restriction to promote an employer-funded plan in D.C. as propaganda in a national proxy battle designed to promote transferring paid leave costs to businesses.
The bill requires a massive behemoth of bureaucracy precluding employer management of benefits and ballooning to city government’s fifth largest function. Infrastructure would cost $100 million before the first benefit – delayed until 2020 on a timeline laughably optimistic and start-up price ridiculously low-balled.
The District’s sorry record of mounting and managing a huge new agency with nearly 150 administrators and building a never-before-designed online portal system for both employers and employees prompts smart skepticism. More than a few predict the entire plan could collapse under the burden of intrinsic improbability.
Most startling is unexpectedly intense resident opposition to fully two-thirds of the tax on local businesses benefiting non-residents working in the District while the large number of residents working in surrounding states would receive no benefit. It’s the emphatic objection most heard among locals.
Proving more popular than predicted is limiting eligibility to D.C. residents. That would lower the projected cost from $250 million to $80 million and make possible eliminating the business tax in order to comport with the established national standard of funding by employee withholding.
The Washington Post editorial board, calling the bill a “mind-bogglingly bad decision,” has urged Mayor Bowser to veto it.
A mayoral veto, if sustained, would force the Council to consider other approaches and devise a better bill.
Five of 13 D.C. Council members backed one such sensible alternative. Although a sufficient tally to sustain a mayoral veto, a newly comprised Council sworn-in this week complicates override prediction calculations.
That plan, proposed by Jack Evans and Mary Cheh, offered identical benefits beginning three years sooner. It would have required businesses to provide paid leave but extended a tax credit to businesses with fewer than 70 employees and a hardship reimbursement for small businesses with unexpectedly high annual usage. It was supported by small businesses vastly outnumbering those backing the tax-plan approach and virtually all larger companies.
It was also a bill Mayor Bowser indicated she could sign.