In pitting locals vs. the Legislature, Minnesota’s preemption battle follows a national pattern

When the Minnesota House of Representatives voted last week for a bill that would prevent local governments from adopting their own wage and benefit ordinances, it joined a growing number of state Legislatures following a similar path.

The move by legislative Republicans to nullify existing ordinances and block any that might come in the future — known as preemption — is part of a national effort to stop city ordinances on workplace and environmental matters. Minneapolis and St. Paul adopted paid sick time ordinances last year. And Minneapolis will likely take a vote on a higher city minimum wage later this year. (The Legislature also has bills in play that would prevent cities from banning the use of plastic bags by some retailers, which Minneapolis passed last year.)

Michael Bare, a program manager for Preemption Watch, which monitors state efforts to block local ordinances, said there has been a steady pace of state laws to block paid leave and local minimum wage ordinances. According to Preemption Watch, 16 states already preempt local ordinances on paid leave and some of those also include local minimum wage ordinances. Three more, including Minnesota, have pay and benefits preemption in play this year.

Bare said he sees a national pattern for preemption ordinances. The topics often appear in just a few states and then, depending on their success, move on to other places. The conservative American Legislative Exchange Council offers model bills that have been the starting point in many states.

“We’ll see the whispers one year — one or two bills — and then the next year we’ll see five to eight states,” Bare said. There is also some moves toward what is termed “blanket preemption,” a policy that has succeeded in Arizona, where the state declares that local governments cannot make policy on issues where the state controls the field.

Bare said some preemption moves are in reaction to a local government taking action. He cites an anti-fracking ordinance in Denton, Texas and the reaction by the state legislature to preempt the move as an example. But he said business and industry are also reacting to national drives such as the $15 minimum wage, moving to preempt them even before the movements reach cities.

Why now?

The first move in Minnesota to preempt on wages and benefits was introduced in 2015, before Minneapolis and St. Paul had begun work on their ordinances — but after activists in the state had begun pushing for them.

While wage and benefits preemption have been perennial topics, the hot topics in 2017 are bills to block local ordinances on LGBT rights, including those addressing transgender bathroom use, and preemptions on the creation of sanctuary cities, Bare said.

Minnesota is relatively permissive when it comes to local ordinances — at least with the eight issue areas Preemption Watch monitors: discrimination ordinances (including topics such as transgender bathroom use); factory farms; gun control; paid leave; e-cigarettes; fire sprinklers; nutrition (including junk food and pop); and smoking bans. Of those, Minnesota only blocks local gun control ordinances, according to Preemption Watch.

Cities are often more liberal than their state legislatures, making the politics of issues such as pay and benefits different at the local level than at the state level. As a result, interest groups that have been losing at the local level have turned their attention to legislatures, where they have better odds of winning. According to the Minneapolis city coordinators office, 29 cities, including Minneapolis and St. Paul, have local ordinances providing for paid sick time, while 25 cities have local minimum wage ordinances.

The changing politics of preemption

What has changed politically in the last two years is that Democrats see cities as the quickest — and in many cases the only — path to adopting higher wages and better benefits. Adopting local ordinances and opposing state-level preemption has become a central Democratic principle.

The dynamics around the issue have changed significantly over the last two years. In 2015, Gov. Mark Dayton and both Democratic legislative leaders said they agreed that wages and benefits should be a legislative issue, not a city-by-city matter. Bills to make that law had bipartisan sponsorship, with a DFL senator being the prime sponsor of the Senate version.

This session, no DFL senators and only three DFL House members were among the 35 sponsors of the main preemption bill, HF 600. Ultimately, only two of those DFL House members voted for the bill: Jean Poppe of Austin and Gene Pelowski, Jr. of Winona.

Dayton has said that he would not accept a preemption bill that doesn’t do something for workers as well. While some of the bills in the Legislature have statewide paid leave as well as a higher statewide minimum wage, they are sponsored only by DFL members and have not been scheduled for hearings.

HF 600 is all that Dayton is likely to see, but since the House vote was not veto-proof, it is hard to see how it could become law. It could, however, be included in an end-of-session omnibus bill package. Such a move could force Dayton to accept it — or veto it and perhaps trigger a special session.

At a press conference last week, House Minority Leader Melissa Hortman of Brooklyn Park said she doubted the governor would allow such proposals to slip through, at least in a budget. “I have a very strong sense that the governor stands with working people and what he is making very clear with Republican legislators is that ideological issues like this have no place in a state budget,” she said.

Hortman acknowledged, however, that she hadn’t discussed strategy with the governor’s office should Republicans use an omnibus bill to try to force Dayton’s hand.

Question about Pathway to $15 backers

At the first hearing on the House bill, supporters included the Minnesota Chamber of Commerce, Minnesota Retailers Association, Associated General Contractors, the Minnesota Trucking Association and the Minnesota Restaurant Association.

The restaurant association’s leadership in the preemption drive at the state level is being used by supporters of a Minneapolis minimum wage to question a proposed compromise regarding how tips are counted toward servers’ overall pay. A new organization called Pathway to $15, led by dozens of restaurant owners in the city, calls for a phasing in of the higher wage and a mechanism for restaurants to count some tips in wages for tipped workers. The proposal would allow tips to be used to cover the difference between the state’s $9.50 per hour minimum wage and any higher city wage, so that tipped workers would be guaranteed at least $15 an hour; if tips don’t close that gap, the employer would have to.

Proponents of what is being termed One Fair Wage want all workers, tipped and untipped, to start with a $15 minimum wage paid by the employer. Tipped workers would keep any tips made on top of that wage.

But many servers and bartenders who attended a meeting at Northbound Smokehouse in Minneapolis Monday said they feared their tips would drop off if patrons knew they were being paid a $15 wage. They also expressed concern that restaurants would either drop full-service or would go to a service charge model that adds up to 20 percent to tabs, with the money distributed to all workers — both tipped and so-called back-of-the-house workers.

At the meeting, Drew Madland, a server at Young Joni in Minneapolis, pointed out that many of the backers of Pathway to $15 are current or former board members of the Minnesota Restaurant Association, and that the state association is behind the formation of the group. Thirty percent of the restaurants (representing nine different restaurant groups) on the list of Pathway to $15 backers are active in the association, Madland said.

“I’m here because I find that the Pathway to $15 and the people behind it is somewhat problematic,” Madland said.

If HF 600 were to become law, as the restaurant association favors, there will be no debate over a Minneapolis minimum wage, he noted. “In order for Pathway to $15 to have any credibility, the nine members of the MRA who are signatories of the press release must clarify their position publicly and affirm that they truly believe in local control,” Madland said. “They must make it clear that although they are directors of the Minnesota Restaurant Association, they and their restaurant organizations do not support HF 600, preemption and the repeal of paid sick leave.”