Key items once part of Democrats’ ambitious agenda likely won’t resurface when state lawmakers step out of isolation and back into the Capitol next month.
The pandemic that closed Colorado and shut down the legislature caused a shift in priorities, and lawmakers’ biggest problem is writing a state budget in the midst of an economic crisis and a surge in unemployment claims.
But there’s one major piece of legislation that top Democrats are unwilling to drop: a paid family leave program. The way they see it, the outbreak of the new coronavirus has only underscored the need.
“The pandemic exposed for a lot more people to see and understand the problem of not having a family-leave program in place,” said Rep. Matt Gray, a Broomfield Democrat. “There is going to be a lot of stuff that falls by the wayside, but this is one thing where we don’t intend to have that happen.”
At the same time the coronavirus has underlined paid sick leave, it also has put a fine point on what was the biggest concern about a state-funded program: How would it stay solvent, especially in times of crisis or economic downturn?
Democrats have tried to pass such a measure for five years, and last year — with a Democrat in the governor’s mansion and the party controlling the statehouse — lawmakers settled for a task force to study paid leave. Whether such a program would pass this session was shaky before the pandemic, because of opposition from Republicans and many in the small-business community, and even from Democratic lawmakers who criticized the proposal for not including contract and seasonal workers.
But the virus that has killed more than 300 Coloradans, including employees at a Greeley meat-packing plant where dozens of workers were infected, emphasizes why employees who are sick should not go to work. A union representative for employees of the JBS plant said some workers were “afraid to come forward as they are not eligible for sick pay,” according to reports.
It’s time to begin “creating a culture of folks staying home when they are sick, which is what we’ve been talking about for years,” said Gray, who plans to sponsor the family-leave measure along with Rep. Yadira Caraveo of Thornton and Sens. Faith Winter of Westminster and Dominick Moreno of Commerce City, all Democrats.
Critics, though, are pointing toward unemployment claims as a clue to how much an economic crisis could tax a paid-leave program. More than 127,000 Coloradans have filed for unemployment since coronavirus shut down the ski industry, restaurants and other businesses. Claims totaled 61,500 in the last week of March alone, compared with the normal 2,000 per week.
“What if Colorado had a state-run, paid-leave program that incurred a utilization rate anywhere close to that of unemployment?” asked Tony Gagliardi, Colorado state director of the National Federation of Independent Business. “It would bankrupt the program and likely the state of Colorado.”
The NFIB is among the groups that say a mandate on small businesses to provide paid leave will have dire financial consequences. For starters, employers would struggle to hold a job open or find a replacement worker when an employee is on leave, they said.
Sen. Jack Tate, a Centennial Republican, hasn’t been swayed by the coronavirus pandemic into supporting paid leave.
The program needs to rest on its own merits, he said, not get pushed through in reaction to the current public health crisis. Tate suggested it amounts to a payroll tax, whether employees pay or employers buy insurance and pass the cost along to employees.
Instead, the pandemic should push Colorado and the nation to look at a disaster-relief insurance program, similar to flood or hurricane insurance but on a larger scale. “We need to be looking at having a conversation nationally about how we manage this risk going forward,” Tate said
Nine other states have paid-leave programs, and analysts are watching to see how they fare through the coronavirus outbreak. The programs expected to have the hardest time are in New York and New Jersey, two of the states where the pandemic has been the deadliest. In New Jersey, state leaders expanded access to the program in recent weeks, saying that anyone who is even suspected of being exposed to the virus can qualify for paid time off.
The federal emergency-aid package passed by Congress to address the pandemic included funds so that small businesses can provide paid leave for their workers. But the federal stimulus expires at the end of 2020.
The family-leave proposal pitched last year in Colorado would have required paycheck deductions from all Colorado workers, as well as employer contributions, with the total of those two equaling 0.64% of a worker’s salary. The funds would have gone into an account run by the state Department of Labor and Employment, which would approve requests and dispense money to Coloradans who needed time off to have a baby, adopt a baby, care for a sick or dying loved one, or recover from a health issue. The annual cap was 12 weeks.
This year’s legislation is not yet written, and sponsors don’t plan to introduce it until after May 18, when the legislature is scheduled to return to work.
It’s likely to look different than the 2019 pitch, based on the recommendations of the task force that studied the issue for seven months.
Gov. Jared Polis urged the group to consider a private-sector model instead of a social insurance program run by the state government. Polis’ idea would work similar to the state’s health insurance exchange, and business owners would shop for paid-leave insurance for their employees.
Lawmakers working on the proposal are using the break in the legislative session to “talk with everyone basically,” Gray said. The legislator is concerned about whether Colorado could build a private-market system “in the middle of a crisis.”
“It was already challenging,” he said. “That, I think, is still an open question.”
Besides, Gray said, it’s nearly impossible to discuss it with the governor now, as the chief executive and his staff are “living day to day” as they deal with the biggest health and economic crisis in modern times.
A previous draft of this year’s proposal created a mandate for businesses to provide paid leave for their employees, and set up a need for a private market where they could buy that type of insurance, said Jennifer Greenfield, a University of Denver associate professor who has done multiple studies of family-leave policy, including one commissioned by the task force last fall.
“That was still very much a draft,” she said. “There was debate about whether there would be a state-run plan that would be offered alongside that plan.” And there was ongoing discussion about how to include ski industry staff, who work for four months at a stretch, or gig workers who drive for companies such as Uber and Grubhub.
A major concern about the private-sector option is that certain types of businesses — those who employ more women of childbearing age, for example — would end up paying more to provide paid-family leave. A state-run program would even out premiums for all.
Even if Colorado had a paid-leave program today, not everyone suffering because of the coronavirus outbreak would get help, Greenfield said.
People who contracted the virus could take paid leave, as could family members who needed time off to care for those with COVID-19. “But the situation that so many of us are in, that we are not able to work because schools got closed, that would not be covered,” she said. “It would not help the small business owner who was told by the governor that they had to close.”
The professor wonders if New York’s paid-leave program, which is a hybrid of private-sector and state government, will result in insurance companies asking for a bailout. New Jersey’s social insurance program, which has seen a steady number of claims over time, could see claims double or more this year, Greenfield said.
She views a paid-leave program as one piece of the safety net, a complement to unemployment insurance and other government programs that help individuals, or in this case an entire country, get through a crisis.
“As with any social insurance program, they’re not really designed all that well for these unprecedented emergencies, and there is an important role for a federal government to make sure that those programs can remain an effective safety net even in times of extremely high demand,” Greenfield said.
“This is an extraordinary year. And the program wouldn’t be designed to be fully solvent in one of these times of extreme emergency.”
The fiscal note for last year’s legislation included a $110 million bond to kick-start family and medical leave, which was predicted to grow to a $1.2 billion program in 2024 as the premiums rolled in from workers and employers.
Kathy White, deputy director of the Colorado Fiscal Institute and a member of the paid-leave task force, said that if Colorado had passed a paid-leave program five years ago, the state would have been in a better position to help people handle the current crisis.
“It would have been one more tool we had in place to help us weather this crisis,” White said. “These are programs that provide a bridge when things are running as normal.”
An actuarial analysis reviewed by the task force provided a framework for creating a paid-leave program that remained solvent over a 10-year period, including economic downturns, she said. And the task force recommended that the state collect premiums for 12 months prior to paying benefits, ensuring an adequate fund balance at the start.
While the emergency paid-leave stimulus passed by Congress is needed, White said, it’s better to have programs already in place so “you don’t have anybody who is needing to make the decisions at the time of crisis.”
“I’m hoping the good that might come out of this is that we become better planners,” she said. “I hope that it’s a priority when lawmakers come back.”
If the legislature and Polis don’t agree on a paid-leave program, voters might have a chance to decide. Colorado Families First is working to get a measure on the November ballot that would create paid leave in Colorado.
The group lamented last week that the initiative was facing a challenge from the Denver Metro Chamber of Commerce “despite the clear and present need for family and medical leave exposed by the pandemic.”