By Sen. Trey Stewart

According to the personal finance website Wallethub, Maine has the third-highest tax burden in our nation. But that embarrassing fact hasn’t stopped Democratic lawmakers and Gov. Janet Mills from trying to create an entirely new tax on small businesses and workers.

Hello, this is Senate Republican Leader Trey Stewart of Aroostook County. It’s my pleasure to join you for this week’s Republican Radio Address.

The new payroll tax Democrats want to impose on Maine workers and employers would fund a paid family medical leave program. In the process, however, it would make Maine less competitive, our workers poorer, and put some businesses at risk.

The bill, LD 1964, was voted out of committee along party lines on Thursday and will head to the Senate floor. Fortunately, there is still time and a better way to give Mainers paid family medical leave without further overtaxing our businesses and workers. We need to look no further than our neighbor to the south.

New Hampshire has shown that states can provide economic security to workers during significant life events without employer mandates and new taxes. Their groundbreaking Paid Family Medical Leave Plan, which began in January, blends family medical leave insurance with business tax credits to provide a safety net for employees who need a leave from work for personal or family health situations.

The way it works is state employees form a risk pool of around 10,000, with MetLife serving as the insurance provider. The program is funded with less than $2 million per year from New Hampshire’s general fund; and the contract with MetLife effectively creates a market for paid family medical leave insurance that other businesses can take advantage of voluntarily.

The program’s cornerstone is a business tax credit, which aims to promote business enrollment. Companies participating in the program can claim a tax credit of up to 50% of the premiums they pay.

The insurance covers employees who need a leave for a variety of reasons, including for children, family members, or issues with military deployment. It provides a minimum of six weeks of wage replacement at 60% of an employee’s average weekly wage, which is capped at the Social Security wage cap. Employers are given the option of a six- or 12-week plan.

The program is open to all Granite State businesses regardless of size. Individual employees can also enroll if their company does not provide a similar benefit, and premiums are capped at just $5 per week through a Paid Family Medical Leave Premium Stabilization Trust Fund backed by the normal taxes paid on premiums. This fund ensures that premiums on individuals never exceed the cap.

New Hampshire’s program offers a novel solution for businesses striving to boost employee retention and provide benefits that are competitive with neighboring markets. The plan also has the benefit of avoiding the creation of a new government bureaucracy with all the extra costs and inefficiencies that often accompany it.

In closing, I need to add a caveat here. Maine is facing a potential referendum vote on paid family medical leave that is much more draconian and damaging if the Legislature doesn’t act. This referendum is spearheaded by the socialist Maine People’s Alliance and would be incredibly damaging to our economy and workforce in Maine. Without some type of paid family medical leave act in place this session, this referendum will move forward.

But how we structure it and the cost involved matters.

If your desire is just to grow government, the Democrats’ plan is for you. But if you want to help Maine families without further taxing our workers, damaging our businesses and making Maine even less competitive than we already are, you should support New Hampshire’s innovative voluntary policy model.

For me, I’ll choose the latter.

Again, this is Senator Trey Stewart of Aroostook County. I hope you have a great weekend.

Senator Trey Stewart represents District 2, which includes communities in Aroostook and Penobscot counties. He is the Senate Republican Leader and a member of the Legislative Council.