Legislative update: Partial state government shutdown looms

From Diana Carlen
WAWG Lobbyist

Last Wednesday, Gov. Inslee called a third special session for legislators to finalize a state operating budget for 2017-2019. If legislators do not agree on a budget that the governor will sign by midnight on June 30, there will a partial state government shutdown. When calling the third special session, the governor stated that he would not sign a stopgap spending measure to keep the government going past June 30.

Last Tuesday, budget negotiators received an updated revenue forecast that provided them with the final puzzle to finish their work. The revenue forecast was slightly higher than expected with the state to bring in an additional $159 million over the next biennium. Budget leads have been publicly optimistic that they will have an agreement and avoid the government shutdown. Budget negotiators were working all weekend to get an agreement. Practically speaking, an agreement needs to be reached by Tuesday to meet the deadline.

Legislators could still end up working into July on matters outside the operating budget such as the capital budget which does not legally need to be finalized by July 1. Senate Republicans have stated that they will not pass a capital budget unless there is a legislative fix to a Supreme Court case known as Hirst which limited the use of permit exempt wells. Senate Republicans have passed a legislative fix to Hirst three times this year, but the House has not yet taken action.

Agreement reached on new statewide paid family and disability leave program

The Legislature introduced dueling bills early in the 2017 session to create a funded, paid family and disability leave program. Representatives from the labor and business communities and each of the legislative caucuses have been negotiating over the past few months to see if they could reach agreement on a program. Last week, the negotiators announced that they had reached a tentative agreement on the parameters of the program and will be introducing new legislation for a vote later this month. The program is intended to cover all employees and provide paid leave for a medical disability as well as paid leave to care for a family member.  Here are some of the parameters of the final deal:

  • The Employment Security Department (ESD) will administer the program. ESD will collect the premiums and make the payments to covered individuals.
  • Employees must work 820 hours in the last five quarters to qualify – once they qualify, they are vested and there is no waiting period to use the benefit if they change employers.
  • There will be 12 weeks of family leave and 12 weeks of disability leave with a combined 16-week cap in a 12-month period.
  • Employees will receive a percentage of their weekly wage, with the lowest paid employees receiving 90 percent of their average weekly wage. Those earning more will receive a lower percentage with a maximum of $1,000 per week.
  • Premium sharing will be 45 percent employee paid and 55 percent employer paid for the disability leave portion of the program and 100 percent employee paid for the family leave portion of the program. Only employers with more than 50 employees will pay the employer premium, but all employees will pay the employee share.
  • The state will begin collecting premiums in 2019 and benefits will begin in 2020.
  • Job protections provisions (i.e. keeping jobs open for employees) will be similar to FMLA (federal law) and only apply to employers with 50 or more employees.
  • There will be a waiver program for employers who offer equal to or better benefits to opt out of the state program. There will not be a specific exemption for collective bargaining agreements.
  • Cities will be preempted from adopting additional requirements for family and disability leave for employers in their jurisdictions.

ESD is estimating a tax rate of 0.4 percent and the expected employer share is 37 percent, so if you have an annual payroll of $2,000,000 x 0.4 percent tax = $8,000 x 37 percent employer share = $2,960 per year for the employer.

Leave a Reply