Other Voices Against FAMLI

One of the hottest debates in Colorado and the nation at large today is about paid family and medical leave (FAMLI) insurance programs.

There is currently a ballot question in Colorado called Proposition #118 – Paid Family Medical Leave Insurance Program, which would implement through the ballot box what the state legislature has failed five times to create.

I have written several op-ed pieces in opposition to this program. They are linked at the bottom of this post. This post isn’t about me and my opposition, however.

Lest anyone think that I am the lone voice against this terrible idea, I am not.

A Colorado think tank called Common Sense Institute has performed an in-depth analysis of the program that would be created if Proposition 118 passes. Their white paper includes the key finding that the program could be insolvent by 2024 if the program starts at a claims rate of 6.2% and an average length of leave of 9.5 weeks. The Proposition #118 estimated utilization rate of 3.5% is well below the actual utilization rates for other states, indicating that the FAMLI program would quickly get out of control.

The Common Sense Institute also wrote another white paper about the last FAMLI bill that was introduced in the state legislature – SB 19-188. The key conclusion in this white paper is:

Putting aside the arguments over the need for a state-run paid leave program, and the cost assumptions underlying SB-188, it is important to step back and consider the way this legislation is being pursued. By establishing a state enterprise, SB-188 would establish a TABOR-exempt enterprise with authority to raise revenue directly on the transaction of labor between an employer and an employee. Whether the courts decide these payroll premiums constitute a tax or not, asking voters to decide the issue would certainly be consistent with the spirit of the Colorado Constitution. Supporters and opponents of SB-188 may disagree about the need for this legislation and how much it will likely cost, but this much is clear: The payroll premiums needed to fund a state-run paid leave program will impose a cost increase directly on the work of millions of Coloradans. For this reason alone, debating this proposal fully with the state’s voters is an idea worthy of consideration.” [Emphasis mine]

Another white paper about Proposition 118 titled Prop 118 – Yet Another Painful Blow to Small Businesses? by policy analyst, small business advocate and author Diana Petrak (also a member of the 2019 Paid Family and Medical Leave Task Force) talks about how the impacts on small business of Proposition 118 are unclear, concerns about the unpredictable growth of the program, how it impinges on the employee/employer relationship and how costs are difficult to quantify and track.  

The final conclusion: “Colorado small businesses have had to make terribly difficult choices in 2020 – with uncertainty nearly a constant. The passage of Prop 118, paid leave, on top of the many other recent regulatory measures, may be the deciding factor for them. Small businesses across the state plea for voters to consider the risks carefully and reject this costly proposal.”

Additional papers on paid family and medical leave by Colorado Policy Pathways can be found here:

Colorado Proposition 118 Key Provisions and Top Concerns

Expectations for Colorado Paid Family Leave Should be Tempered by the Potential Risks

Are Colorado Workers Ready to Commit to a Paid Leave Tax?

In this video, commentator John Stossel talks about how mandated (i.e. government-run) paid leave is bad for business and, more importantly, for most women.

A study mentioned in this video found that “…the labor force participation rate, the unemployment rate, and the duration of unemployment among young women rose in California compared to states that did not adopt paid family leave. The latter two findings regarding higher young women’s unemployment and unemployment duration are unanticipated effects of the CPFL [California Paid Family Leave] program.”

Dave Davia, CEO & Executive Vice President of Rocky Mountain Mechanical Contractors Association weighs in:

“Finally, and perhaps most troubling is the long-term financial stability of this program. The CSI [Common Sense Institute] finds that the new program will be insolvent almost from day one. If the program starts at a claims rate of 6.2% and an average leave of 9.5 weeks, the 2023 premium collections will not be sufficient to cover benefit and administrative costs in the first year of the program in 2024.”

Columnist Krista Kafer writes in the Denver Post: “Consider the impact on employees of a midsized Denver restaurant. Let’s say the restaurant has 30 employees and manages on a lean profit margin of 3% typical of that industry. Unlike a big high tech business in Boulder that can manage with a few employees on extended leave, the restaurant must have a certain number of wait staff and cooks to handle peak meal hours.  They have to hire and train temporary workers for every employee on leave. According to the Common Sense Institute, such a restaurant will experience a 10% decrease in their already slender margin.”

Finally, Colorado journalists over the years have weighed in opposing bills introduced in prior years.

  • In 2018, Aurora Sentinel Editor Dave Perry – who is about as progressive as it’s possible to be – wrote an editorial against HB 18-1001:

Colorado paid family leave act is a fatally flawed, noble cause legislators should block.

  • In the same year, Denver Post columnist Megan Schrader wrote this op-ed in opposition to HB 18-1001:

The hard economics of paid family leave in Colorado

  • And again last year in 2019 the Aurora Sentinel Editorial Board called out the paid leave bill as the tax that it is, again in opposition to SB 19-188.

EDITORIAL: This year’s uncapped FAMLI paid-leave bill is fatally flaw [sic] again – a tax is a tax

My previous blog posts on FAMLI are linked below. Needless to say, I strongly recommend a “NO” vote on Proposition 118.

No More FAMLI, August 27, 2020

The Case Against FAMLI, January 15, 2020

More Objections to FAMLI, March 17, 2019

Say No to FAMLI, March 10, 2019

Twenty-One Reasons to Oppose HB 18-1001, February 25, 2018

Vote No HB 18-1001, February 6, 2018

My table summarizing the four failed bills and Initiative #283 (which became Proposition #118 when it was approved for the ballot). Note how the bills and 118 are largely similar. Note also how the previous four bills failed, even last year when the Democrats controlled the Senate. It’s also noteworthy that this year, they could not even agree on a bill to introduce.

This program is wrong for Colorado. Please vote “No” on Proposition #118.

By Richard D. Turnquist

September 26, 2020