A Colorado Senate committee Monday night killed a measure that would have provided $57.5 million in fee relief related to the state’s new paid family and parental leave program in a surprising reversal of a benefit touted by Gov. Jared Polis.

The Senate Finance Committee unanimously rejected House Bill 1305 after the legislation’s sponsor, Sen. Faith Winter, D-Westminster, requested its demise without explanation.

Democratic leadership in the legislature says the bill was rejected so lawmakers can use the $57.5 million set aside for the measure for other purposes. The money, which comes from hundreds of millions of dollars in one-time funding the legislature is distributing this year, won’t go toward one other specific program or initiative, according to Senate Majority Leader Dominick Moreno, D-Commerce City.

“Obviously there are a number of one-time (funding) requests from the governor’s office and I think the feeling was we were a bit out of balance with requests that were initiated by the governor’s office compared to one-time funding priorities from the General Assembly,” Moreno said.

In other words: The governor wanted the money spent on paid family and parental leave fee relief but the legislature disagreed.

State Rep. Yadira Caraveo, a Democrat and prime sponsor of the bill in the House, said her understanding was that senators and the Polis administration came to “some sort of agreement … to kill it.”

“I wasn’t part of the conversations,” she said.

Caraveo declined to say if she was disappointed by the bill’s fate. “I don’t know what the conversations were there, so I really don’t know,” she said.

House Bill 1305 would have, for six months, reduced the fee split between employers and employees that the state will charge starting next year as part of Colorado’s new, voter-approved paid family and parental leave program.

The reduction would have dropped the fee rate to 0.81% of an employees’ wages from 0.9%, a decrease of 0.09 percentage points. For a worker making $4,000 a month, that would have dropped the fee to $32.40 from $36 a month.

Employers pay half the fee; employees pay the other half.

The $57.5 million would have gone toward backfilling the revenue lost because of the rate cut.

Business groups complained that the relief was a “pittance” and that if lawmakers really wanted to help businesses contend with rising costs they would have delayed implementation of the program.

Polis made paid family and parental leave fee relief a key part of his fiscal year 2022-23 budget, even discussing the proposal during a November news conference last year ahead of the 2022 legislative session.

“The governor and the legislature are making even more progress on saving people money, including a $400 per person tax rebate and major property tax relief announced yesterday,” Conor Cahill, a spokesman for the governor, said in a written statement. “We are not surprised to see this bill set aside to support even bigger accomplishments to save people money.”

Polis and Democrats, who are facing election-year pressure from Republicans over the rising cost of living, set aside more than $300 million in the fiscal year 2022-23 budget, which begins July 1, for government fee and tax relief. Of that, $44 million will go toward delaying for nine months the start of a new 2-cent-per-gallon gas fee enacted through a bill pushed last year by Democrats.

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