Senate Finance panel probes fiscal-note process after DEED actuarial changes to paid-leave estimates

Chair Marty opened a Senate Finance Committee hearing Feb. 5 on the state fiscal-note process, focusing on fiscal notes produced for proposed changes to the paid family medical leave law enacted in 2023 (chapter 59).

The committee spent most of the hearing questioning the Legislative Budget Office, the Department of Employment and Economic Development and Minnesota Management and Budget about how baseline assumptions were chosen and how significant changes were communicated to legislators. The discussion followed concern raised during a May 10, 2024, Senate Finance hearing about fiscal notes tied to paid leave proposals.

The Legislative Budget Office’s director, Christian Larsen, told the committee that the office and agencies faced three central challenges in preparing fiscal notes for proposed paid-leave changes: establishing an appropriate baseline for comparison, refinements to agency interpretations of the statute (particularly whether the seven-day “qualifying event” generated retroactive pay for those days), and exercise of permissive authority by the agency to adjust the program’s first-year premium rate. “The challenge of the paid leave law, really there’s three things, and it all comes down to really defining baseline,” Larsen said. He noted the program was enacted in 2023 but benefits do not begin until Jan. 1, 2026, which complicated baseline selection.

Larsen described two candidate baselines that…