Maine schools prepare for cost of up to $13 million in first 6 months of new paid family leave program

AUGUSTA — Maine’s new Paid Family and Medical Leave Program will drive budget increases for school districts across the state this year, officials say.

While the program is still two years away from its launch and in its early rulemaking phase, school districts are already tallying the cost, now estimated to be between $6.5 million-$13 million in its first six months. This also depends on the contribution split settled on in schools’ contract negotiations.

Because of the timing of school budgets, district officials are planning now to build the added cost into their spending plans for the upcoming budget year.

State law says employers are required to contribute up to 0.5% of their employee payroll to the state’s Paid Family and Medical Leave system starting in January 2025, in the middle of the upcoming budget year for school districts. Schools are preparing to contribute up to the 1% max contribution, though, because they say they have received little guidance from the state and want to plan cautiously.

In Maine, the state currently pays for 55% of district costs, with taxpayers funding the rest through their property tax.

But in addition to the 1% of payroll districts plan to set aside to fund their share of the state-mandated program, they say they are also budgeting the added costs of hiring substitutes to fill in for employees on extended leaves.

Early numbers collected by Maine School Management Association put school districts’ total contributions at $13 million for the first six months. For Kennebec County’s school districts, the added cost is estimated to be $1,319,519 and for Somerset County districts, it’s estimated to be $439,880.

School district officials have talked about the steep increase to their upcoming budgets since the start of the current school year and said they have received little to no guidance from the state on how to budget or work out the increase it will have on taxpayers.

Earlier this month, Howard Tuttle, superintendent of Somerville-based Regional School Unit 12, said the district is preparing to add $120,000 into its next budget for the added costs of the new program, an amount he told the school board is “quite shocking.”

While the budget for the next fiscal year is being drafted now, the current budget is $26.4 million.

“Our folks have sick days that they save, and if something happens and they have (federal) paid family medical (leave), they pay through it with sick days,” Tuttle explained. “That’s not true for employers everywhere, and in this fund, in Maine, you can apply to and get paid, but the way it’s funded is by tapping 1% of our payroll.”

Because they will be paid under the new plan, employees can save their sick time and, including their now-extended time off, their allowed time off will be doubled, to about 120 days.

Maine School Management Association, a statewide advocacy organization that helps school districts with policy and legislative issues, is working to provide as much information as possible to superintendents to help them manage the new state law and the impact it will have on districts.

An early poll by MSMA sent to every school district across the state showed the law will have an estimated $13 million statewide impact on school districts for just six months, between when the 1% contributions start Jan. 1, 2025 to the end of the school districts’ fiscal year, June 30, 2025.

In Gardiner, School Administrative District 11 officials have projected the cost of the program for their 500-employee payroll at around $180,000.

Andrea Disch, the district’s business manager, said the cost of hiring substitute teachers must be taken into consideration, too, with the extended amount of time employees can take off. While the absent employee’s job is protected while on extended leave, districts may need to find temporary workers to fill in.

Substitute teachers have already proved to be difficult to hire, with school districts raising the substitute teacher pay to be more competitive.

“So, during the time the person is out and paying the 1% tax, the district would have to find a sub,” Disch said.

The new Maine law gives employees the option of taking up to 90 days (about three months) of paid time off, which is the same amount of time offered through existing federal options that involve unpaid time off. They can take medical leave for people who aren’t in their direct family but have a familial relationship, while being paid between 66% and 90% of their salary, depending on where their wages fall compared to state averages..

Steve Bailey, executive director of the Maine School Management Association, said they are learning more as they go as they wait for the authority appointed to oversee the program to draft rules in the spring.

In the meantime, The Department of Labor is hosting online listening sessions for the public to ask questions about the law as they begin to formalize rules for the program. Upcoming sessions are scheduled for Thursday and Feb. 12. A public hearing will be held Feb. 28, where public comment will be taken.

Editor’s Note: This story has been updated to reflect that employers are required to contribute up to 0.5% of their employee payroll to the new Paid Family and Medical Leave program. It has also been updated to reflect that people on leave can be paid between 66% and 90% of their salary under the new law.