By Michael Shepherd - June 29, 2023
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A pledge from the governor runs into a progressive power play on paid leave. Last year, Gov. Janet Mills renewed her past pledge to not increase taxes on Mainers. On Thursday, she announced that she would sign a paid family and medical leave bill that includes a new payroll tax into law.

Things have been trending in this direction since the Democratic-led Legislature sent the new program to the governor's desk. It has been a long journey. In May, she issued criticisms of the bill that aligned with those from business interests. She had been huddling with them for months on the issue.

By the end, top legislators made enough tweaks to win her support. But that was not the only factor. Progressive groups would have likely sent another paid leave measure to the 2024 ballot if the Legislature did not act. Democrats brought that up over and over again in their push for a legislative solution. 

The influence campaign ended up working. Mills acknowledged her pledge in a Portland Press Herald column announcing her decision, saying she lives "in the real world" and had to consider it "against the prospect of a referendum that would likely result in a payroll tax anyway." In the end, the bill adds up to a stable program that will help Mainers, she said.

"Recognizing that, and recognizing that a referendum is not the way we should consider this complicated policy proposal, I will sign the budget agreement that includes paid family and medical leave," she wrote.

The program, which will provide 12 weeks of paid leave under a state program funded by a payroll tax of no more than 1 percent split between employees and employers, except the latter group will be exempt if they have fewer than 15 workers. To lock down Mills' support, Democrats made it so workers have to give reasonable notice of time off in most cases among other changes.

These changes did not win over business groups including the Maine State Chamber of Commerce. But they are aligned with Mills on many other issues, and they have not criticized the governor for her move so far. That task has been left to legislative Republicans.

“We’re going to be layering another tax on top of already some of the highest-taxed people in America,” Sen. Eric Brakey, R-Auburn, said in floor debate last week.

Mills was no friend to the progressive groups early in the paid leave discussions. But her tax pledge put her in a difficult position once lawmakers started responding to her concerns. Expect to hear a lot more about all of these elements over the next few days, and watch the implementation phase for more tension between progressives, businesses and the state.