By Mike Kaszuba

With the Legislature convening in three days, one of Minnesota's most influential labor unions said it would push for an ambitious job-creating package that features a state bonding bill of at least $1 billion and a $12-an-hour state wage subsidy program. In outlining its proposal Monday the Minnesota AFL-CIO, which represents 300,000 union workers in the state, acknowledged it did not know how much the wage subsidy program would cost but said raising taxes, particularly on higher income Minnesotans, would be one way to help pay for it. The proposal would not only be at odds with initiatives coming from Gov. Tim Pawlenty and many Republicans, but also likely goes further than some DFLers want. But Shar Knutson, the president of the Minnesota AFL-CIO, said the nation's lingering unemployment crisis required bold action, and more revenue from taxpayers. "We are done with smoke and mirrors. . .and shifts and unallotments," said Knutson, criticizing the budget approach of Pawlenty and the Republicans. "Budget cuts alone are much more harmful to the state's economy". While not specifically calling for higher taxes on the affluent, Knutson and other AFL-CIO leaders on several occasions Monday said that the state's middle class families, earning between $35,000 and $97,000 annually, paid 12.4 percent of their income in state and local taxes. Those earning $194,000 and more, they added, pay only 9 percent. Knutson and others however were vague on how the proposal was being greeted by the DFL's top legislative leaders, including House Speaker Margaret Kelliher and Senate Majority Leader Larry Pogemiller. "We'll see," Knutson replied, when asked whether Kelliher, Pogemiller and other top DFLers were supporting it. The most unique feature of the AFL-CIO plan would be a state-subsidized wage subsidy, though union leaders said they were unsure of its cost. Under the proposal, as an example, a Minnesota company with 50 employees being paid $12 an hour could hire 10 additional employees and pay them $6 an hour and have the state temporarily subsidize the other $6 of their hourly wage. Companies paying workers less than $10 an hour would not be eligible for the program. State AFL-CIO secretary treasurer Steve Hunter said that though there might be a reluctance at the Legislature for such a proposal, the union was prepared to remind legislators that it was an election year. "You need to stir up the constituencies in the legislator's home districts. We have 201 positions open this fall in the elections," he said.