A financial reckoning lurks silently in the shadows ready to envelop the overburdened, overwhelmed Connecticut taxpayer. Commencing Jan. 1, unless you are a state employee, your weekly paychecks will get smaller; 0.5% smaller to be exact. Phase One of "The Paid Family and Medical Leave Act" officially institutes its slow grind of separating you from your hard-earned income at the onset of the new year.
State employees are exempt from this new tax since they currently have a publicly funded plan already in place.
Following the 2018 election, the Connecticut legislature enacted the Paid Family and Medical Leave Act, which creates a system that will entitle each eligible Connecticut employee to paid family leave. The deduction applies to each employee's wages up to the Social Security contribution base ($142,800 in 2021). The program is targeted to begin in 2022 and will provide workers in Connecticut with access to the necessary benefits that will allow them to take time off work when they need to care for their own health, a newborn child, or a sick family member.
Critics are concerned the plan is underfunded and overtly susceptible to fraud. Naysayers contend "The Paid Family and Medical Leave Act" is another example of death by 1,000 paper cuts: small tax after small tax after small tax until you finally bleed out.
Connecticut's nanny state is methodically tightening its grip on our individual freedoms, choking the state's taxpayers, making fiscal suffocation inevitable. What we have is yet another underfunded big-government program designed to displace personal responsibilities.
This state’s residents are taxed enough already. The Tax Foundation released its annual ranking of states based on their overall business tax climate and placed Connecticut 47th in the country. Kiplinger ranked "The 10 Least Tax-Friendly States for Middle-Class Families" and Connecticut was only better than Illinois.
Democrats seemingly know little else but taxes and fees. Brace yourself for 2021 as the state’s bi-annual budget deficit could eclipse $4 billion and legislators will make every effort to squeeze taxpayers for more.
Last week on my radio show, I was lucky enough to sit down and speak with Andrea Barton Reeves, the CEO of the Connecticut Paid Family and Medical Leave Insurance Authority. The authority, which was created through legislation the governor supported and signed, is charged with administering Connecticut’s recently adopted paid family and medical leave program. I applaud her for coming on considering she was well aware of my skepticism about the new law.
I wanted to share a few of our exchanges.
Me: What do you say to the people who are exhausted paying taxes and, in the end, may never use this new program?
Reeves: "I completely understand that, but from my own life experience, time catches up with us. I never thought I would spend two years taking care of my father who became very sick, and I had to leave work with no income replacement."
Can I take time off if it's a friend and not a family member who is sick?
Reeves: "We do have a very expansive definition of family, meaning it could be people who are close to you but might not be related. What most people are concerned about is this definition of close affinity, and we are working hard to narrow that definition while still leaving it flexible enough to allow people to care for people who are close to them."
Is there a department within your organization that looks for fraud?
Reeves: "We plan on partnering with an outside agency that looks for this sort of thing and has the expertise in dealing with it."
Are you confident the plan will have enough money?
Reeves: "In the worst-case scenario we won't run out of money, and with certainty we will be able to pay the claims that people intended to file. The statute does have a provision that allows us to adjust downward the amount of benefits people receive so that the fund will remain solvent."
Despite Reeves's positive intentions and engaging personality, I left the conversation as cynical as when we started. There is no assurance the program will be funded adequately. There appears no concrete answer for combating fraud or abuse in what will be the most liberal family leave policy in the country.
If you earn $40,000/year you'll pay $200 into the system and for that modest sum you get 12 weeks of paid time off at 95% of salary, equating to a return of 47 times your yearly investment. Lacking strong oversight, grifting and grafting will become commonplace.
The underbelly of society and its propensity for unethical behaviors will destroy this road paved with good intentions.
Lee Elci is the morning host for 94.9 News Now radio, a station that provides "Stimulating Talk" with a conservative bent.
Editor's note: This column was updated to correct the tax assessment percentage.
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