Well, this news isn’t exactly surprising:
On New Year’s Day, the state Temporary Disability Insurance tax rate will rise from 1.1% to 1.3% of pay, according to the state Department of Labor and Training. That means someone making $50,000 per year should expect to pay $650 in TDI tax next year compared with $550 this year.
The biggest reason is that Rhode Islanders are beginning to take advantage of a 2013 change in the law that allows them to use the disability program to take time off in order to take care of other people who are injured or sick, or to “bond with a new child.” The sponsor of that legislation insists it’s a small price to pay, and she works diligently every year to make it a little less small:
Sen. Gayle Goldin, sponsor of the 2013 bill that created caregiver insurance, said Tuesday that more people taking advantage of the program is a sign that it’s working and that taxpayers are getting good value.
“It’s a very small [tax] increase to pay for a benefit that helps people when they need it the most,” said Goldin, a Providence Democrat.
Going from 1.1% of pay to 1.3% is actually an 18% increase. What should families forgo in order to cover a benefit that people in 46 other states somehow manage to live without?
Naturally, the state’s army of spokespeople spins it as a positive:
“It is not surprising that improved income conditions would increase claims; more employed workers result in more individuals eligible, therefore, more potential users,” Angelika Pellegrino, spokeswoman for the Department of Labor and Training, wrote in an email.
That comment has two layers of deceit. First, the program is funded by a percentage of total payroll. More people working means more people paying into the system, which shouldn’t have to be adjusted if it’s designed well. Of course, if Rhode Island is only creating low-paying jobs, then new tax contributions would be less likely to cover the cost of coverage.
Second, the increase in employed Rhode Islanders cannot possibly account for an 18% increase in the rate. The number of people employed has barely budged year over year, and the number of jobs based in the state is up only 1.5%.
We should also remember that these policies pile up, including, for example, more-recently-mandated paid leave for employees. That policy arguably froze and reverse employment increases in the state.
This 18% increase in the TDI tax is a visible warning sign for what we can’t see. We can’t know all the jobs that would have been created or the raises that would have been given in the absence of these progressive policies. And we can’t forget that employers (and potential employers) can’t only adjust for the policies that have been passed; they have to plan for all of the new burdens their betters in the General Assembly are likely to impose every year.