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Editorial: State employee pact deserves green light

  • Article by: EDITORIAL BOARD
  • Updated: September 6, 2012 - 8:06 PM

Union contract isn't ideal, but could lead to better one next time.

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Governor Mark Dayton.

Photo: Glen Stubbe, Star Tribune

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Minnesota Republican legislators are right to want individual state employees to pay a portion of their health insurance premiums. They're also justified in asking that performance measures be factored into seniority-based "step" increases that typically occur during the first 10 years of an employee's tenure.

Gov. Mark Dayton says he wants those things too. He's the first governor to require that all state employees undergo annual performance appraisals, laying the foundation for a compensation system that includes performance factors. He asked the state's two largest unions for a contract through June 30, 2013, requiring single employees to pay 10 percent of their health insurance premiums. Those premiums are entirely borne by taxpayers now.

But in collective bargaining, management does not always get everything it wants. That's evident from the proposed contract that the administration and the two largest state employees' unions, AFSCME and MAPE (Minnesota Association of Professional Employees), finally hammered out after more than a year of negotiations -- only to have it rejected last week by a Republican-dominated legislative panel on a 6-4 party line vote.

The proposed contract does not include the 10 percent individual employee share of premiums Dayton sought. Instead, it increases employee-paid copayments and deductibles to provide the state with $8 million in savings in the first six months of 2013, the foreshortened life of the proposed contract. In addition, the pay-for-performance system was set aside until the new employee evaluations are up and running.

Those features -- and not the contract's proposed 2 percent, six-month, across-the-board pay raise -- are the ones Republican legislators cited when they voted not to allow the proposed new contract to go into effect.

We share the GOP disappointment but disagree with their rejection. Saying no to this contract misses a chance to claim for taxpayers the $8 million in union concessions for health care costs. It's likely to harden union resistance to pay-for-performance and other changes in the terms of state employment that will be needed in coming years. And it sets an unwelcome precedent of legislative meddling in labor-management negotiations.

The proposed contract's health care concessions are no small thing, given their context: State employees have seen no across-the-board salary increases for three and a half years, and zero increases in five of the last nine years. AFSCME and MAPE employees took a $65 million hit from the 2011 shutdown -- on average, losing about 6 percent of their 2011 pay. Few Minnesotans paid a larger price for the inability of politicians to set a state budget on time.

Given that backdrop, it's understandable that union members bridle when they hear GOP politicians say that "now's the time" for deeper concessions. We suspect legislators have their eyes on the election calendar when they make that claim.

Instead, now would have been an opportune time to heal a labor-management relationship that has been bruised by years of budget crises in St. Paul. Union buy-in will be needed to create a performance evaluation system that can be built into today's seniority-based compensation "steps," then take on bigger structural issues facing the state's aging workforce. A third of state workers are past age 50. Educational requirements for new hires are rising. Pay compression at the top end of job classifications threatens to cost the state top talent.

DFLer Dayton won election with strong backing from public employee unions. He faces understandable suspicion that he could have driven a harder bargain and meaningful compensation reform. He can prove the skeptics wrong by pressing forward with the performance evaluation system he has started, and by sending the unions a clear message that he will continue to call on employees to share the cost of individual health insurance premiums. Those issues belong prominently on the bargaining table when negotiations begin next spring for 2013-15 employee contracts.

Meanwhile, the 2013 Legislature will get one more chance to say yes to the contract that the GOP-dominated Subcommittee on Employee Relations rejected. We think they should. A belated "yes" won't make a great difference in dollars to either workers or taxpayers. But it could help ease the way to a better contract next time.

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Readers, what do you think? To offer an opinion considered for publication as a letter to the editor, please fill out this form. Follow us on Twitter @StribOpinion and Facebook at facebook.com/StribOpinion.

  • ABOUT 'STEPS'

    •The several state employee contracts vary, but typically they include five "step" increases based on seniority that occur during the first 10 years of employment.

    •Step increases typically add between 2.5 percent and 3.5 percent to total compensation costs.

    •More than 40 percent of employees under union contracts no longer receive step increases.

    •Though overall wages for state employees were frozen in five of the last nine years, step increases were allowed in all but one year, fiscal 2010.

    Source: Minnesota Management and Budget; Legislative Coordinating Commission.

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