When it comes to hundreds of millions of dollars in state employee contracts, “just trust us” isn’t good enough from Minnesota Management and Budget (MMB). Inaccurate and incomplete numbers, a history of dramatic miscalculation, and a real chance of blowing state agency budgets is why, as chair of the Subcommittee on Employee Relations, I voted to reject recent MAPE (Minnesota Association of Professional Employees) and AFSCME contracts for state employees.
In a Star Tribune editorial about the rejection of these contracts (“Keep seeking a deal on state worker pay,” Oct. 14), it was implied that ensuring that our state can hire and retain employees should be the prime consideration when looking at approving these contracts. Having a strong and capable public workforce is important, but so is protecting the taxpayers and ensuring that contract agreements fall within the parameters of the bipartisan budget signed into law this year.
Public employee contracts are one of the key cost drivers of state government growth. Minnesota Management and Budget provided subcommittee members with inaccurate and incomplete data not based on actual salary information, which failed to provide a complete picture of how these contracts would affect each individual agency budget. We could not in good conscience sign off on the contracts, so we instead sent MMB and the unions back to the negotiating table.
First, MMB was not forthcoming with a full budgetary breakdown by agency of how the proposed salary increases would be allocated. The total cost of these contracts is approximately $4.7 billion, a $170 million increase for this biennium with a future impact of almost $250 million in the following biennium above current spending. Union contracts could conceivably eat up all additional dollars given to various state agencies, leaving no room for other operating expenditures. That could throw agency budgets completely out of whack and risk a reduction in public services.
Simply trusting MMB on its projections will not cut it when during the last budget cycle, it underestimated MAPE and AFSCME contract costs by 40 percent — going over budget by a whopping $141 million. Rubber-stamping these contracts with only vague estimates and promises of fiscal responsibility is not in the best interest of our state or its taxpayers.
What’s more, it’s important to note that these contracts are being misrepresented as simply a 2 percent and 2.25 percent increase for employees over the next two years, when in fact these contracts include across-the-board increases, step increases and increased benefits. When compounding those together over two years, the result could be as high as an 11 percent raise — something not seen in the private sector. Even with the rejection of these contracts, many state employees still will be receiving sizable step increases in the next year.
Finally, these contracts could have a harmful impact for some state agencies. For the Minnesota State colleges and universities, these negotiated union contracts are more than double what they can handle financially. This could lead to program cuts, future tuition hikes or other problems for the system’s thousands of students and employees across the state.
There are many state employees who provide value in all areas of state government. I have no problem with approving reasonable raises to those who serve the people of Minnesota well. But legislators on the subcommittee first and foremost have a fiduciary duty to taxpayers. Members cannot be expected to approve huge union contract agreements with incomplete data and inaccurate financial information, risking our state’s finances and leaving taxpayers on the hook.
Marion O’Neill, R-Maple Lake, is a member of the Minnesota House.