Gov. Whitmer says 'it's time' for guaranteed paid family, medical leave in Michigan

Lansing — Gov. Gretchen Whitmer called on Michigan lawmakers Wednesday to give all workers in the state "breathing room" by creating a new program to offer them paid family and medical leave, a proposal that some worry could amount to a tax on Michigan's businesses and workers.

Whitmer, a Democrat who is increasingly gaining national political attention, made guaranteed paid time off for workers after the birth of a child or for health reasons a key policy priority in a speech about her legislative goals for the remainder of 2023.

Her 24-minute speech in downtown Lansing was wide-ranging, touching on business permitting, protecting democracy, public health and the environment, in which she called for Michigan to move toward "100% clean energy" sources. At one point, the governor said the state must face climate change head-on while growing the economy amid the biggest boom in manufacturing in decades.

But many of the details and potential implications of the proposals, such as how the paid leave plan would be funded, weren't laid out in the remarks. Whitmer spokesman Bobby Leddy said the governor's office planned to work with lawmakers to iron out the specifics. The governor didn't take questions from reporters after the address.

During the speech, she contended paid family and medical leave is a priority for the state's workers.

"It helps workers be there for their families," Whitmer said. "It gives you breathing room to get better when you're sick, to bond with your baby or care for a family member. Right now, 77% of Michigan workers do not have access to paid family, medical leave."

Numbers from a compensation survey conducted by the U.S. Bureau of Labor Statistics showed paid sick leave was available to 77% of workers in private industry nationally in March 2022. Workers in government job had higher rates of paid sick leave, according to the data.

Business groups, like the Michigan Chamber of Commerce, are concerned about Whitmer's leave plan and the impacts of a potential new tax to fund it.

Wendy Block, the Michigan Chamber's senior vice president of business advocacy, described the proposal as "a new, $1 billion-plus annual payroll tax on every worker and business to fund a massive, new paid leave government insurance program."

"A one-size-fits-all mandate of this type and magnitude would result in higher taxes, bloated government bureaucracy and hurt the very people it is intending to help, especially small businesses and Michiganders living paycheck-to-paycheck," Block added in a statement.

A leave proposal backed by a group of Michigan Senate Democrats and filed in May would allow workers to take up to 15 weeks of leave in a year for the birth of a child, a family member's health condition or their own serious health issue.

The bill, introduced by Sen. Erika Geiss, D-Taylor, would provide workers a percentage of their regular pay — the percentage would depend on the person's salary — and be funded through a payroll contribution program, administered by the state.

Under the Geiss proposal, which could differ from where negotiations in the Legislature end up, the contribution amount would be a percentage of wages per employee to be determined by the state as "sufficient to fund the payments of family leave optimal coverage benefits."

'Let's get this done'

The Senate proposal would offer "expansive criteria" for when someone would qualify for paid leave, said Brian Calley, president of the Small Business Association of Michigan. The program appeared to be modeled off the state's unemployment system, he added.

More:Gov. Gretchen Whitmer to advocate for paid leave program this fall

“It’s a new payroll tax on employers and employees. It would do a lot of damage to an already challenging labor landscape," said Calley, who was the lieutenant governor under Republican former Gov. Rick Snyder.

House Speaker Joe Tate, D-Detroit, didn't commit Wednesday to the idea of supporting a new payroll tax to fund a paid leave program. Democrats control 56 of the 110 seats in the Michigan House. All of the seats will be on the ballot in November 2024.

"I'd have to look at that," Tate told reporters.

Whitmer contended that the paid leave policy would attract new residents to Michigan and would level "the playing field" between large companies that already offer paid leave and small businesses that don't.

"No one should have to choose between being there for their family and a paycheck," Whitmer said Wednesday. "Paid family and medical leave is a pro-family, pro-small business policy that will grow our state and its economy. Let’s get this done, too."

At another point, Whitmer said: "It's time for paid family and medical leave."

She didn't lay out how the new benefit would be funded. Currently, the state has only a requirement that large businesses offer short-term paid sick leave.

A paid leave program enacted in Minnesota will allow workers up to 12 weeks off a year with partial pay to care for a newborn or sick family member and up to 12 weeks to recover from a serious illness, according to the Associated Press. The Minnesota system will be funded by a 0.7% payroll tax for employers who can deduct half of their premiums from workers' pay, the AP reported.

Michigan Senate Minority Leader Aric Nesbitt, R-Porter Township, criticized the Minnesota plan on Wednesday, saying it would operate like the state's unemployment system, which he described as "fraught with fraud." Nesbitt said the Minnesota program doesn't take effect until 2026, which would be the final year of Whitmer's final term.

"I am sure Whitmer is going to do the same thing," Nesbitt said.

Instead of imposing a new tax and a mandate, Michigan should give businesses an incentive to offer paid leave, Nesbitt added.

Whitmer on energy

Whitmer also urged lawmakers to enact a 100% clean energy standard for Michigan and shift permitting wind and solar projects to the state level.

"This means all the energy we produce will be from wind, solar or other commonsense sources," the governor said during her remarks.

She didn't mention a specific deadline for the clean energy standard. But Senate Democrats have already proposed the phasing out of coal-fired electricity generating plants by 2030, requiring utilities to make progress toward the elimination of greenhouse gas emissions from power generation by 2035 and developing a 100% clean energy standard by 2035. 

State Rep. Bryan Posthumus, R-Cannon Township, countered that many communities rely on natural gas and propane currently and converting to other sources would be costly.

"When energy costs skyrocket and reliability plummets, the economy fails," Posthumus said. "We cannot let that happen so the governor can appease environmentalists and coastal elites."

Democrats in the Michigan House have been working with Whitmer's office on a plan to allow state government to approve large-scale solar energy projects because local townships have been frequently blocking the developments. The struggles getting the projects authorized are viewed by environmentalists as a key obstacle to reaching the broader clean energy goals.

"Let’s permit clean energy projects through the MPSC (Michigan Public Service Commission), just like all other sources of energy," Whitmer said. "This ensures local perspectives are reflected in the planning process while also allowing us to move faster on installation."

More:As local battles rage across Michigan, state looks for new path on solar energy

It wasn't clear how moving the permitting to the state commission would ensure "local perspectives are reflected."

Nesbitt, the top Republican in the Michigan Senate, said there needs to remain some level of local input in the process.

“Without that, you’ll have a high degree of negativity on having those sited there," Nesbitt said.

The political landscape

In November, Democrats won narrow majorities in the House and Senate for the first time in 40 years, while Whitmer scored a second four-year term in the governor's office. They've used their power over the first eight months of the year to enact gun control measures, decrease taxes on retirement income and repeal the Republican-authored 2012 right-to-work law, which had barred businesses and unions from reaching agreements that required workers to pay union dues or fees as a condition of their employment.

Democrats are engaged in an internal debate over when the 2023 session should end.

For now, they've scheduled the state's presidential primary for Feb. 27, and election officials have begun planning for that date. But because of legislative rules that require the session to adjourn 90 days before bills take effect, they will likely have to end this year's session at some point in November to ensure the primary happens in February.

Some Democrats want to ensure the primary happens on Feb. 27, so Michigan begins wielding earlier influence over the presidential nominating process. But others don't want to sacrifice potentially two months of lawmaking and take criticism from Republicans for breaking earlier when President Joe Biden is expected to easily win the Democratic nomination.

cmauger@detroitnews.com

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