AUGUSTA — The Maine Senate voted 22-12 along party lines Wednesday to create a statewide paid family and medical leave program. Gov. Janet Mills is still deciding whether to support the measure.

If passed by the House and signed into law by the governor, the program would place a new tax on most employers and employees to pay for a program that compensates workers for as much as 12 weeks of leave from their jobs. Workers could qualify for paid leave to take care of newborns, elderly family members, for their own illness and a few other qualifying reasons.

Mills has not made a final decision, although many of her administration’s recommendations to make the bill more business-friendly have been incorporated into the bill, including less generous benefit payouts and tougher eligibility requirements.

“The governor continues to review the bill and its amendments, but she is encouraged by the committee’s changes and thanks them for their work,” Ben Goodman, a spokesperson for Mills, said in an email Wednesday.

The Senate vote followed straight party lines, with Democrats in favor and Republicans opposed. The House is expected to take up the bill Thursday.

“What is in front of you is a compromise tailored for the Maine economy that will work for all of us,” said Sen. Mattie Daughtry, D-Brunswick, a co-sponsor of the bill.

In an interview after the vote, Daughtry said that negotiations with Mills led to several amendments, but the core of the bill remains.

“I feel really positive about the conversations we have had with the governor,” Daughtry said. Although Democrats have majorities in the House and Senate, the bill does not have enough support to override a Mills veto, if she opposes the proposal.

Quincy Hentzel, chief executive officer of the Portland Regional Chamber of Commerce, said the changes do not go far enough to address the concerns of businesses. One of Hentzel’s recommendations would turn paid family leave into a voluntary program, similar to programs in New Hampshire and Vermont. Twelve states – including Massachusetts, Connecticut and Rhode Island – and the District of Columbia have mandatory paid family leave programs similar to the Maine proposal.

“We came to this process supportive of paid leave, and wanting a seat at the table as the legislative process played out and the proposal was refined into a workable program for all,” Hentzel said in an email response to questions. ” Regrettably, the current proposal fails to adequately address the major concerns voiced by many of our members. We are disappointed that there has been an unwillingness to bring all parties to the table to find consensus.”

The bill would cost $12 million to implement, according to a fiscal note attached to the bill, and $14 million per year to administer the program.

Democrats and some supportive business owners contend that paid family leave would be a benefit for businesses, saying the benefit would attract workers to Maine, especially small-business owners who currently can’t afford to offer a paid leave benefit. The bill exempts businesses with 15 or fewer employees from paying into the program, although workers could still claim the benefit.

Sen. Mike Tipping, D-Orono, described the proposal as a “transformative” program. “This policy will improve the lives of Maine people in immeasurable ways,” he said.

But Republicans argued the payroll tax on employers and workers would place too much of a burden on them. “We should not be layering another tax on some of the most highest-taxed people in the nation,” said Sen. Eric Brakey, R-Auburn. Brakey argued that the program should be voluntary, not mandatory.

Sen. Matt Pouliot, R-Augusta, called it an “unreasonable” proposal with taxes that are too high and benefits that are too generous, and lacks any compromise with Republicans. “True bipartisanship unfortunately seems to be dead,” he said.

If the bill doesn’t pass or fails to get the governor’s signature, the Maine Women’s Lobby and progressive advocacy group Maine People’s Alliance have collected more than 80,000 signatures to place a proposal on a future statewide referendum ballot, likely November 2024.

Daughtry, a small-business owner, said the carefully crafted compromise would be a better choice for Maine than a bill approved by referendum that would be less likely to take into account business concerns.

The bill, L.D. 1964, calls for a payroll tax of 0.7% to 1% of wages, which would be split evenly between employer and employee. That works out to no more than $5 per week for a worker making $50,000, with the worker and employer each paying no more than $2.50 a week. The precise cost would depend on how much revenue is needed to cover projected costs of the program.

Daughtry said 1% is the maximum, and she expects actuaries who would evaluate the amount of revenue needed to pay out the benefits to end up with closer to a 0.7% tax. Split evenly, that would be 0.35% for employer and employee.

If implemented, the program would pay up to 90% of a worker’s regular wages for a maximum of 12 weeks of leave for reasons that could include caring for a new baby or a family member with a medical condition. The benefit amount would be equal to 90% of a worker’s wages for income earned up to $518, half of Maine’s weekly average wage. For income earned above that amount, the payout would be 66% of wages. Employees would be required to work at least 120 days to have their jobs protected when they come back.

The maximum weekly benefit amount would be set at the state average weekly wage of $1,036.

Employers that offer comparable plans could opt out of the program. And businesses with 15 or fewer workers would be exempt from paying into it, but most employees, including part-time and self-employed workers, could still claim benefits.

If the proposal is adopted, employer and employee contributions would start on Jan. 1, 2025, and processing of claims would start one year later.

Destie Hohman Sprague, executive director of the Maine Women’s Lobby, said the bill is strong and will “help families and our economy.”

“I feel like this is an authentic compromise,” Hohman Sprague said. “Everyone gave a little and got a little.”

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