Carla Sonntag, president of the New Mexico Business Coalition (NMBC), criticized the passage of a bill taxing employees and employers despite known solvency issues. She made this statement in a press release on February 28.
"Employees and employers should not be taxed on a program that will fail financially and lead to higher taxes," said Sonntag. "When a legislative body would be so irresponsible as to pass a bill that taxes employees and employers and is known to have such huge solvency issues."
According to the New Mexico State Legislature, House Bill 11 has placed a financial burden on employers and employees. The release does not provide full details on the tax structure. HB 11 expands on previous Paid Family and Medical Leave proposals. The revised bill includes payroll contributions of 0.15% from employers and 0.2% from employees for businesses with more than five workers, potentially placing a greater strain on small businesses and their employees.
Legislative analysis notes that the paid parental leave program is projected to cost between $115 million to $171 million annually by 2031, depending on uptake rates. If every child born in the state leads to two claims at the highest reimbursement (mean wage), it could cost nearly $300 million. Funding for the six-week paid parental leave comes from the Early Childhood Education and Care Fund (ECECF).
In 2021, New Mexico’s Unemployment Insurance Trust Fund faced a shortfall due to the economic impact of the COVID-19 pandemic. To restore solvency, the state allocated over $600 million in federal funding from the American Rescue Plan Act (ARPA). This infusion was necessary to ensure continued unemployment benefits and maintain financial stability within the program.
Sonntag, president and CEO of NMBC, advocates for business interests in New Mexico. During the COVID-19 shutdowns, she pushed for a reopening plan and drafted legislation to curb rising unemployment insurance costs, according to ABQ Connect.
