Dear Gov. Hogan, It’s Time to Veto Dem Sick Bill

John O. Sullivan

“If either of these job-killing bills reaches my desk, they are dead on arrival. I will veto them immediately”
-MD Governor Larry Hogan on Sick Leave proposals

Tomorrow, Maryland Governor Larry Hogan is scheduled to hold a bill signing and press conference. One of the most controversial bills which Governor Hogan has neither signed nor vetoed is H.B. 1, the Healthy Working Families Act.

The Healthy Working Families Act is a bill proposed by Democratic legislators in the General Assembly that would require all businesses in Maryland with at least 15 employees to provide paid sick leave.

This bill was released in response to the Governor’s proposed legislation which would require only businesses with 50 or more employees to provide paid sick leave, with tax incentives for smaller employers who provide sick leave. The caveat of this is that the number of employees is calculated by location. So while the Governor’s proposed policy would require only the largest employers to provide paid sick leave, while the Democratic plan (HB 1), would require almost all Maryland employers to provide paid sick leave.

The Democratic bill was introduced in a direct response to the Governor’s proposal. Democratic leaders accused Governor Hogan of “stealing their thunder” and co-opting Democratic ideas for votes and political support. Hogan retorted by saying his plan Hogan retorted by saying his plan was a balanced, fair, and common sense approach to paid sick leave.”

At this point, the Governor has three options: He can veto HB 1 as promised, he can allow the bill to become law without his signature, or he can sign the bill into law himself.

If he signs the bill into law, Governor Hogan might score some serious points with the Democratic electorate, which as all Marylanders (and most readers of this blog) know, is almost the whole ball game. However, in signing the bill, Governor Hogan would be signalling that he can be strong armed whenever the Democratic super-majority feels like it, and he’ll just go along happily.

The middle road is to allow the bill to become law, but without his signature. The Governor has 6 more days, until May 30th, to sign or veto all bills presented to him. Without his signature or veto, any bills submitted to him take effect the next day, on June 1st. While this has the merit of allowing the Governor to protect his relationship with his base, it also has the relative effect of making him look like a flip-flopping, dilly-dallying, fence-riding, waffling pansy.

The third and final road available to the Governor: Veto.

The Veto is, in my opinion, the only plausible option for Governor Hogan on HB 1. He did, after all, swear to veto it. In fact, he swore to veto it “immediately,” and immediately has come and gone. There is a political cost to empty threats. When a veto threat is issued and not acted upon, it looks like (because it is) “politics as usual,” damaging the executive’s reputation with the Electorate. It also has the unfortunate effect of emboldening the opposition. If a threat to veto is made and not executed, the opposition will pay even less heed to the threat the next time.

Vetoing the bill also has a political upside. While the Democrats passed HB1 with veto-proof majorities, that does not necessarily mean that they will overrule a veto. Governor Hogan is immensely popular, and when the General Assembly reconvenes in January, they’ll be mere months from the 2018 election. The sick leave bill was controversial, and with an election year looming, a veto may shake loose enough Democratic votes to keep HB1 from becoming law. This would be a major political coup for the Governor just 10 months from the general election.

Plus, it’s just a bad bill. I am by all means a supporter for employer provided paid sick leave, but only within reason. Maryland passed an aggressive minimum wage of $10.10 just a few gears ago, a bill that is still being phased in. History has shown us time and again that markets can and will adjust to changing labor laws and regulations, but the Democrat’s sick leave bill is too far, too fast. With Maryland’s minimum wage set to go up $1.35 over the next 13 months, the time is not ripe for a broad, sweeping, sick leave bill. Markets will adapt, but they do not always respond quickly. Both history and the contemporary show us that the free market will find ways to absorb new costs and adapt to new regulations. However, in the worlds of my Econ 101 professor, the government’s role in the economy (from his point of view) is to smooth over the rough patches and help boost the good times. Government should try to avoid creating disturbances whenever possible. Too many additional burdens at once threatens the health of the system as a whole, and HB 1 does just that.

Governor Hogan’s plan is a step down the road to paid sick leave for all Maryland workers. It is a small step, but it is still a step. By contrast, the Democratic plan is the equivalent of a giant cartoon cannon firing us down the same road. Requiring locations with 50 or more employees to provide paid sick leave, as in the Governor’s proposal, does not capture a large portion of the workforce, but it also sets precedent and leaves the door open to revisit the issue in a few years. Additionally, the Governor’s plan rewards smaller firms for what many of them are already doing, and incentivizes those who aren’t.

Finally, in the political realm, the paid sick leave debate presents a unique opportunity for Governor Hogan to make a powerful political statement. Paid sick leave is among the most popular Democratic economic positions. Governor Hogan can send a message with veto that he wants bipartisanship, that Democrats cannot simply dictate without compromise, and that on this score his ideas are just plain better.

The biggest risk the Governor runs with a veto of this bill is that Democrats will paint him as anti-sick leave and anti-worker in the coming 2018 election. The Governor already has his work cut out for him in that election, and he hardly needs to hand the Democrats another club to beat him with. However, this is exactly what the Democrats wanted. I just don’t think it’s going to work. It will be easy enough for Governor Hogan to point to his own well publicized plan, and contrast his progressive, forward-thinking leadership with the Democrat’s petty, reactionary, partisanship.

In all, the Democratic plan represents a meritorious idea, paid sick leave for all. I would hope for a day when all workers are free from the decision of taking care of their wallets over themselves. However, it just isn’t the right time. Changes which are expected and planned for, small, continual, persistent changes over time are preferable (from a policy and governance perspective) to large, sweeping, sudden changes. Playing politics with serious, long lasting policy decisions is not a good idea. HB 1 would never have been introduced by the Democrats if Governor Hogan hadn’t presented his own plan. Unfortunately for the Democrats, while their plan might be a more idealistic end goal, Governor Hogan’s plan is the more realistic first step. Governor Hogan should not hesitate to veto this law, and I would hope that the Democrats in the Assembly would carefully reconsider the bill and find a compromise.

One thought on “Dear Gov. Hogan, It’s Time to Veto Dem Sick Bill

  1. He said no so I am looking forward to your follow-up. As a former small business CPA I know how small businesses struggle and the ones who try to do right by their employees struggle the most so I hope the incentives are effective.

    Like

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