Pension debate heats up at Capitol

Turning up the heat on an already sensitive topic nationally, Republican legislators in Minnesota said Monday that the state's public employees need to pay more of their pension costs to help solve the state's budget crisis.

Introducing what she called a "very simple bill," Sen. Gretchen Hoffman, R-Vergas, said the plan would have public employees pay 3 percentage points more into their pensions, a move that would save the state $50 million every two years. She said it not only would help solve the state's budget deficit but also would 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 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 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.

The proposal would raise the amount of correctional workers' salaries that goes to pensions from 8.6 percent to 11.6 percent. Judges' contributions would go from 8 percent of their salary to 11 percent, and basic members of the Public Employees Retirement Association would generally go from 9.1 percent to 12.1 percent.

The proposal would also include legislators, increasing their pension contribution from 9 percent of their salary to 12 percent beginning in July.

In a day of increased rhetoric over unions, DFLers and Republicans sparred over analogies to neighboring Wisconsin, where Republicans successfully passed legislation scaling back public employee pensions and collective bargaining rights.

"This is not an attack on any workers," said Hoffman, who is part of the freshman class that helped Republicans gain a majority in the state Senate, as well as the House. "It's a personal responsibility thing. We talk about it in [the] private sector all the time."

Rep. Ryan Winkler, DFL-Golden Valley, said Minnesota's Republicans were trying to piggyback on the headlines coming from Wisconsin. "We are not Wisconsin, but Minnesota Republicans are desperately trying to bring that controversy across the border," he said.

Seide and DFL legislators, meanwhile, were questioned at a news 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. 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."

Also Monday, DFLers and labor leaders criticized Republicans as being quick to focus on public employee pensions but opposed to DFL plans -- pushed largely by Gov. Mark Dayton -- to ask the state's wealthiest residents to pay more taxes.

"On average, the AFSCME members that I represent make $38,000 a year," said Seide. While Republicans were preoccupied with public employee pensions, Seide said, "they can't ask people making over a half million [dollars] a year to simply pay the same amount that an average Minnesotan pays ... in taxes."