SAINT PAUL -- (August 30, 2012) -- Citing lack of reform and unsustainable status quo, Republicans on the Subcommittee on Employee Relations today voted to reject the tentative contract agreements negotiated by Governor Mark Dayton and two of the state’s largest unions - American Federation of State, County and Municipal Employees (AFSCME) and Minnesota Association of Professional Employees (MAPE).
"We have communicated our expectations for new contracts to Governor Dayton since January," said Senator Mike Parry (R-Waseca), Chair of the Subcommittee on Employee Relations. " We support salary increases. However, as we have stated many times, we would like to see performance as a determining factor in salary increases. The time to reform government costs and accountability is now."
The contracts as proposed provide all AFSCME and MAPE employees a 2 percent across the board increase beginning in January 2013. Eligible employees -- more than 50 percent of the state workforce -- will also receive tenure-based increases known as "steps"” When combined with the 2 percent across the board increase, this result in a total 2.75% increase in FY2012 and a 4.75% increase in FY2013 for AFSCME; and a 3.5% increase in FY2012 and 5.5% increase in FY2013 for MAPE. In addition to wage increases, individual employees will continue to receive free health insurance as the state would pay for 100 percent of the insurance premium for individuals and 85 percent of the premium for family coverage.
The contracts as proposed will cost the state an additional $59 million in FY2013, an increase of $16 million from their current contracts. State agencies will need to absorb $174 million for contract costs in FY2014-2015.
"Wage increases based on seniority are a poor proxy for rewarding performance," said Representative Steve Drazkowski (R-Mazeppa), Vice-Chair of the Subcommittee on Employee Relations. "Minnesota can no longer afford to reward people based on how long they have been in state service. A 7 to 9 percent increase in salary is simply unsustainable, particularly looking into the next biennium."
In 2009, Minnesota was one of only 14 states to pay 100 percent of the monthly premium costs for a basic or standard health plan for some or all individual employees. This plan costs taxpayers nearly one-half billion dollars per biennium to provide the 50,000 enrolled workers with fully paid health insurance premiums. Health coverage in Minnesota is anticipated to increase by 9 percent in 2013 alone.
Republicans on the Subcommittee on Employee Relations said initial negotiations between Governor Dayton and the unions targeted a 10 percent contribution from employees toward their health insurance premiums. It was not included in the final agreement.
"State employees have long benefitted from a broad, high cost health insurance plan that requires no premium contribution for individual coverage," Representative Drazkowski said. "We agree with Governor Dayton’s initial position of requiring employees to pay a percentage of their health insurance premiums. The fiscal pressures facing our state require a change in state benefits plans. Health insurance premiums should align with private sector and be cost-shared by employer and employee."
The Subcommittee on Employee Relations cannot modify a collective bargaining agreement. Republicans on the subcommittee said they call upon Governor Mark Dayton to return to the bargaining table and reach an agreement that includes reform and protects taxpayers.
"If Governor Dayton and the unions are able to present tentative contracts that contain the performance-based wage increases and employee contribution to health insurance premiums, we are confident the Subcommittee on Employee Relations would be in a position to grant interim legislative approval,"Senator Parry said.
In the meantime, AFSCME and MAPE will continue to operate under the existing contract, which provides funding for autopilot wage increases and continued free health insurance for all state employees.