State and local governments would be eligible for emergency paid leave payroll tax credits under legislation introduced by a federal lawmaker.
H.R. 6643, the Supporting State and Local Leaders Act, introduced April 28, would amend sections 7001(c) and 7003(c) of the Families First Coronavirus Response Act (P.L. 116-127) to authorize tax credits for federal, state, and local governments to fund paid sick, family, and medical leave.
The legislation, introduced by Rep. Brad Schneider, D-Ill., would have the same effective date as the Families First Coronavirus Response Act. That act, signed into law March 18, included payroll tax credits for private employers to offset costs for all sick leave and family leave wages and paid leave for workers.
Expanding those payroll tax credits to public employers would provide aid for struggling state and local budgets, according to an April 28 release on the proposed legislation. The bill has 108 bipartisan cosponsors, according to the release.
“Allowing public employers like state and local governments and public schools, utilities, and transit agencies to access the same payroll tax credits available to private businesses is a straightforward and bipartisan way to help our communities during this time of need,” Schneider said in the release.
The proposed legislation is an opportunity for bipartisan support, as evidenced by the large number of cosponsors, according to Steven Kirsch, Schneider’s communications director. “This is a straightforward way to help,” Kirsch told Tax Notes April 28, acknowledging that there has been a lot of opposition lately —mostly from Senate Majority Leader Mitch McConnell, R-Ky. — to helping states and local governments.
Funding state and local governments has emerged as a priority for many Democratic lawmakers and was further amplified when McConnell, who has publicly opposed a major funding proposal for states, said on a radio talk show that he would rather see a bankruptcy scheme developed for states.