Turning up the heat on an already sensitive topic nationally, Republican legislators in Minnesota said Monday that the state’s public employees needed to pay more of their pensions to help solve the state’s budget crisis.
Calling the legislation a “very simple bill”, Sen. Gretchen Hoffman, R-Vergas, said the plan would have public employees pay 3 percent more into their pensions, a move that would save the state $50 million every two years. She said the plan would not only help solve the state’s budget deficit, but also help make the various public pension plans in Minnesota fully funded.
“Nobody’s being demonized,” said Sen. Dave Thompson, R-Lakeville, responding to critics who said the plan was part of a nationwide attack by Republicans on public employees. “We are facing financial realities.”
But the proposal by Hoffman, part of the freshman class of Republicans in the Minnesota Senate, touched off an immediate, emotional response from state labor leaders and DFL legislators.
“We do not have a pension crisis,” said Eliot Seide, executive director of the American Federation of State, County and Municipal Employees, Council 5. “This is, simply put, an attack on public workers.” Seide said at least a dozen legislative bills had been introduced at the State Capitol this year aimed at cutting public employee benefits
“At last, do these people have no shame at all?” he asked.
In a sign of how quickly the proposal was moving in the Republican-controlled Legislature, Sen. Mike Parry, R-Waseca, who chairs the Senate State Government Innovation and Veterans Committee, said the legislation would be introduced Monday and be referred to his committee. Parry said the plan would not await to be heard by a legislative panel on pensions.
The proposal would, for example, require correctional employees to raise the percentage of their salary that goes to their pensions from 8.6 percent to 11.6 percent. Judges would go from 8 percent of their salary to 11 percent of their salary, and basic members of the Public Employees Retirement Association would generally go from 9.1 percent to 12.1 percent.
Seide and DFL legislators meanwhile were questioned at a press conference about a Star Tribune report Sunday that showed a small but select group of public employees were receiving monthly pension benefits as high as $16,250 a month. The benefits, which have since been capped for subsequent retirees, were made possible by provisions that allowed high-ranking public employees who retired in the 1980s and 1990s to take advantage of the large gains in the stock market.
Under the plan, former Hennepin County sheriff Don Omodt receives $12,419 a month, former Hennepin County administrator Dale Ackmann receives $14,039 a month and former state Supreme Court Justice Lawrence Yetka gets $10,101 a month.
“There were situations where we did have very rich pensions,” said Sen. Sandra Pappas, DFL-St. Paul. “It was during the years when the stock market was doing really well. . .we kind of learned our lesson from that.”
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