“PFML is both the largest mandate and largest single tax increase in the state’s history. Yet, lawmakers relied on deeply flawed cost estimates that leaned on assumptions from the program’s advocates.”
MOORHEAD (Feb. 13, 2024) – In an op-ed for The Forum of Fargo-Moorhead, NFIB State Director John Reynolds highlighted the findings of an independent actuarial report on the Walz administration’s new Paid Family Medical Leave (PFML) program’s price tag, and three key steps to prevent the program from bankrupting Minnesota.
In the op-ed, Reynolds writes:
“An independent actuarial report released last fall […] found that PFML will cost $200 million more every year than the Walz administration claimed. This program is funded by a new payroll tax, so the higher price tag means even more money coming out of your paycheck.
“And that’s not the only place the PFML tax will show up. You’ll see it in your property tax bill because cities, counties and schools will need more money to pay for this unfunded mandate. You’ll see it in your groceries, at your daycare, and nearly every daily expense because PFML costs will be offset by higher prices.
“Minnesotans should ask themselves how this keeps happening. When it comes to the biggest taxpayer-funded projects, why does this state keep getting it so wrong?”
CLICK HERE to read the full op-ed. Excerpts are below:
Check the Price Tag on Minnesota’s Paid Family and Medical Leave Program Before It’s Too Late
The Forum of Fargo-Moorhead
By: John Reynolds
Feb. 11, 2024
The latest example is the new Paid Family and Medical Leave program, or PFML. […]
Before it passed, schools, cities, small businesses, and many others warned the program would cost far more than what state officials estimated.
These warnings were proved correct by an independent actuarial report released last fall. The report found that PFML will cost $200 million more every year than the Walz administration claimed. This program is funded by a new payroll tax, so the higher price tag means even more money coming out of your paycheck. […]
Part of the problem is that lawmakers rarely obtain independent cost estimates for major projects before passing them into law. In other words, they have to pass it to find out what’s in it.
That’s the case with PFML, which is essentially a government-run insurance company with 400 new state employees and annual budget of $75 million. PFML is both the largest mandate and largest single tax increase in the state’s history. Yet, lawmakers relied on deeply flawed cost estimates that leaned on assumptions from the program’s advocates. […]
One of the PFML law’s sponsors said the annual $200 million cost overrun was “right in line” with expectations. There is no sign anyone will be held accountable, or that steps will be taken to protect taxpayers.
Fortunately, there’s still time to fix this before it’s too late. […]
First, check the price tag. Gov. Walz said the PFML tax would be just 0.7%, so that’s what the program should cost. If the actuarial report is correct, the PFML Tax could be anywhere from 30% to 70% higher than that. Lawmakers should make that rate permanent and make the program live within its means.
Second, make the program voluntary for small employers who can’t afford a mandate.
Third, create an affordable opt-in program for employees who still want coverage.
These recommendations are not far-fetched concepts; they are taken directly from the best parts of other state paid leave laws. […]
