Gov. Chris Sununu has vetoed state Democrats proposed family leave bill, likely setting up an override battle in the state legislature.

“Senate Bill 1 is an income tax that neither I nor the people of New Hampshire will ever support,” Sununu said in a brief statement issued after the veto. “I have proposed a paid family medical leave plan that will work – one that is voluntary, affordable and income tax free. That is the New Hampshire way.”

SB1 would have established a family and medical leave insurance program paid for with a 0.5 percent payroll tax. The program would provide workers with up to 12 weeks a year of leave with partial, temporary wage replacement when they need to take time out to care for themselves or a family member. Sununu had backed a different plan, created in partnership with Vermont, which would offer paid family leave to the two states’ 18,000 workers, but also allow residents to buy into the program at their own expense.

“We thank Gov. Sununu for his veto of Senate Bill 1. Among its many issues, the legislation would have levied a new payroll tax on employers in the state. Companies (or potentially individual employees) would have been forced to pay for this benefit, even if they never asked for it or used it. It would be especially burdensome for small businesses. New Hampshire employers know what benefit packages are best for their employees. It’s not the role of government to mandate employers adopt an expensive one-size-fits-all program,” Business and Industry Association President Jim Roche said in a statement.

SB1 backers, citing recent UNH polling data that showed around two-thirds of the state supported a paid family leave that covers all workers instead of Sununu’s buy-in plan, said the governor’s move would advance income inequality. In a statement, the Campaign for a Family Friendly Economy noted the state Senate will have an opportunity to vote to override the veto later this year.