Recession didn't shrink Minnesota's public payroll

Give Gov. Mark Dayton credit for being brave enough to step in front of the state's most powerful business groups and stand by his pledge to raise their taxes to help erase a projected $6.2 billion deficit.

He might even be able to sell them on the notion of shared sacrifice if his preliminary budget demonstrates a willingness to reduce Minnesota's payroll.

Around the country, shrinking sales and property tax revenue combined with mounting pension obligations are forcing financially strapped state and local governments to shed jobs to make ends meet.

Everywhere, that is, but in Minnesota.

Nationally, 215,000 fewer people were working in state or local government jobs at the end of 2010 than at the end of 2007, according to Friday's national jobs report from the Bureau of Labor Statistics.

In Minnesota, however, the number of people working in state and local government, including education, was 383,100, or 200 more than in December 2007.

That's red meat to business groups, whose members have endured the deepest recession in their lifetimes. Minnesota manufacturers, for example, cut 37,000 jobs during that same period; retailers chopped 20,000.

Eliot Seide, executive director of the American Federation of State, County and Municipal Employees, Council 5, disputes the notion that public-sector employees have not made sacrifices. He cites four pay freezes during the past eight years, and says his union lost almost 1,600 members during the tenure of former Gov. Tim Pawlenty.

While local government has remained mostly unchanged during the recession, it did shrink in the earlier years of Pawlenty's administration, thanks in part to large cuts to local government aid and shifts in education funding. The number of full-time equivalents employed by the city of Minneapolis, for example, is down more than 10 percent since 2002.

Under Pawlenty, though, the number of people working in state jobs rose by more than 12,000, or 14 percent.

Still, Seide insists that laying off public sector employees is unnecessary and unwise.

"Minnesota has 71 public employees for every 10,000 residents, which makes us the 10th-leanest in the country," Seide said. "Every time government cuts a public employee job, Main Street loses a customer. It seems to me that's the last thing you want to do in this economy."

Demand for most government services doesn't decline during a recession. We don't stop sending our children to school, we don't stop using highways and criminals don't go on holiday. Ironically, services have been cut at the local and state level because payroll costs have continued to rise.

Where does Gov. Dayton stand on the prospect of trimming the state payroll? A spokeswoman did not respond to that question before deadline. With the exception of the Minnesota Trade Office, none of the spending cuts Dayton outlined as a candidate suggested reductions in the size of state government.

Friday's unemployment report made it clear that economic growth will be slow and likely fitful in the coming years. Solving a $6.2 billion problem will require painful choices by both political parties.