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Hogan counters with paid sick leave compromise

ANNAPOLIS — Facing an expected attempt to override his veto of a paid sick leave law favored by Democrats, Republican Gov. Larry Hogan is offering a compromise package that that includes $100 million in tax breaks to small businesses.

Hogan offered the package as a compromise in advance of an expected battle in the 2018 General Assembly Session. Leading Democratic legislators, however, are rejecting the governor’s proposal, saying the time has come to override the governor’s veto.

“My veto was not the end of the discussion,” Hogan said. “It was an invitation, once again, for open and honest dialogue so together we can get this right.”

The governor’s proposal would phase in paid sick leave benefits for full- and part-time employees starting with businesses of 50 or more employees beginning in 2018. Businesses with 40 or more employees would be required to offer the benefits in 2019 and businesses with at least 25 employees in 2020. Workers would accrue one hour of leave for every 30 worked to a maximum of five days of annual leave.

“It would give the smallest of Maryland’s job creators the time to plan for this and phase it into their budgets,” Hogan said, calling the bill he vetoed “overly complex and burdensome.”

Hogan said he crafted his bill using the vetoed legislation as a guide. Copies of Hogan’s version of the bill were not distributed to the press.

As part of the package, Hogan is proposing $100 million in tax credit for small businesses to help offset the requirements of the law as well as to encourage businesses to offer other benefits such as child care, health spending accounts and tuition reimbursement.

Hogan said he plans to offer the package as emergency legislation when the session begins in about six weeks.

“Fortunately, there’s still time to work together to correct the many flaws of that piece of legislation,” said Hogan, referring to the measure he vetoed.

The prospects of successfully passing a bill that is different from the one Hogan vetoed in May seem remote.

Del. Luke Clippinger, D-Baltimore City and lead sponsor of the House version of the paid sick leave bill that was vetoed, rejected calls for a compromise, saying the legislature has already passed a bill he considers a compromise.

Clippinger called Hogan’s proposal “window dressing” driven by polling that shows strong public support for paid sick leave.

“We’re going to override the governor’s veto,” Clippinger said. “We’re going to do it because we’ve got the votes in the House and I believe we’ve got the votes in the Senate. That’s the story here.”

Clippinger said Hogan has not sought input from lawmakers on the proposal.

The governor’s newest proposal is an attempt to stave off an expected veto fight that would come down to votes in the Senate.

“This isn’t a compromise bill, it’s a retread of old ideas that have already been rejected by the General Assembly,” said Charly Carter, executive director of Maryland Working Families, an organization that supported passage of the legislation.

This spring, Hogan vetoed legislation requiring businesses with 15 or more employees, including part-timers working just 12 hours a week, provide a minimum of five days of paid sick leave. Businesses with fewer employees would have to offer the same number of days as unpaid leave. The bill does not exempt seasonal employees, but workers would not be able to use the leave during their first 106 days of employment.

Hogan offered his own bill earlier this year requiring five days of leave for businesses with at least 50 employees at one location. Companies with fewer employees could voluntarily participate and be eligible for tax breaks that were estimated to cost $60 million annually. That bill died in committee.

The bill passed both chambers with veto-proof majorities. Earlier this year, advocates for the bill said they had commitments from 87 Democratic delegates to override Hogan’s veto, two more than needed. In the Senate, 29 members voted for the bill — the exact number needed to override Hogan’s veto.

Not all business groups are supportive of the governor’s latest effort.

Mike O’Halloran, Maryland director for the National Federation of Independent Businesses, said the proposed compromise package “blunts the impact” of the bill passed earlier this year but will still harm small businesses in the state.

“Although we appreciate Governor Hogan’s continued efforts to protect and promote Maryland small businesses, the bill outlined today still creates uncertainty for the small business community,” O’Halloran said. “The proposal leaves small businesses wondering if they can afford another government-mandated benefit and fails to acknowledge, as the Committee on Paid Leave Policy’s final report does, that employers and employees know best what works for them, not the government.”

Some business groups and Republicans, including Sen. J.B. Jennings, R-Baltimore and Harford counties and leader of the Senate Republicans, believe some who voted for it may now have “buyer’s remorse” and be interested in changing their votes.

Jennings, however, suggested that Democratic leaders, including Senate President Thomas V. Mike Miller Jr., will likely make it tough for those senators to break away.

“If they have the votes they have the votes,” Jennings said. “There’s nothing we can do about it.”

“The Democratic leadership is going to force some of the senators to override the veto and that’s wrong,” said Jennings. “Why should we let partisan politics get involved?”