DFL legislators quietly took Legislature out of the process for approving state worker contracts

The state of Minnesota’s largest state worker unions reached an agreement Friday with the state that will bring a $20 minimum wage and cost of living raises of 5.5% and 4.5% over the next two years starting July 1.

But, for AFSCME Council 5 and the Minnesota Association of Professional Employees, one of the best parts of the new agreement — the first of a dozen or more being negotiated between the state and its unions — is the deal is final when union rank and file ratify it. That is in stark contrast to the past when workers had temporary deals that only became permanent when the House and Senate blessed them – something that could take nearly a year and get wound up in legislative politics. (Details of the deal are here.)

A series of deletions from current law that are contained in the state government omnibus bill quietly took the Legislature out of the approval pathway.

This change began its life as a DFL-sponsored bill; a request of the 17 different union bargaining groups representing 47,000 state workers. DFL lawmakers were receptive both because of their political coalition with the unions and their unhappiness with how Republicans have used ratification as a bargaining chip.

“The need for this change is because our members are really tired of being treated as political pawns in the chess match at the capitol,” said Max Hall, the communications director for AFSCME Council 5 which represents 18,000 state workers. “Once an agreement is reached in good faith by both sides, there’s a duty and an obligation for that to be ratified.”

The state has a complex format for bargaining with employee unions. While non-financial aspects of contracts can be wrestled with first, talks on financial matters must await the adoption of the state budget. Embedded in that document — though not obvious to union negotiators — is money to cover eventual pay and benefit increases.

Minnesota Management and Budget, the state’s budget office, negotiates with the unions on behalf of the state. In the past, once contracts are agreed to and ratified by union members, they went before a joint legislative committee for approval or rejection. If not acted on within 30 days, the contracts would take effect. But any committee approval was conditional and could be rescinded if the House and Senate didn’t agree to the contracts.

The current two-year contracts were ultimately approved in 2022 by the DFL-controlled House and the GOP-controlled Senate. But the Senate vote came with just two days left in the regular session.

Two years earlier, the Senate GOP tried to use contract approval to force a pay freeze on state workers. It came in May of 2020 as the COVID pandemic was decimating the state and national economies. GOP leaders wanted Gov. Tim Walz to renegotiate contracts to cancel a 2.5% cost of living race set to kick in that summer.

“The opposition to these contracts has nothing to do with penalizing or hurting people or sanctioning them for a behavior,” said Rep. Pat Garofalo, R-Farmington that spring. “The opposition to these contracts is that they’re mathematically impossible, given the current fiscal situation we’re in.”

Not acting would have not only canceled the July, 2020 raise but also the raise that had already kicked in on July 1, 2019. But had the Senate not approved, the state and its union workers would have reverted to a previous contract which also carried higher state government costs for employee health care.

The Senate GOP tried to approve the bulk of the contract while canceling the second pay raise.  MMB said that since the law doesn’t allow amendment by the Legislature, it considered the contracts approved and processed the pay raise. A lawsuit by two GOP lawmakers against that act failed.

Another example of legislative attempts to change bargained contracts came in 2003 when then GOP Speaker Steve Sviggum told unions the House would not approve the contracts unless the state’s first domestic partner benefits were removed. Facing the loss of other contracts gains, the unions acquiesced.

Such drama is no more. That power was removed in the state government omnibus bill.

“We changed the process of contract ratification to depoliticize it because in the last decade or so ratification had become a bargaining chip for things not having to do with public employees at all,” said Senate State Government Committee Chair Erin Murphy. The St. Paul DFLer was the sponsor of Senate File 2456 which was later included in her omnibus bill.

Murphy said the Legislature will still control the cost of contracts by putting money into state agencies to cover the eventual costs. The amounts are not obvious in budget spreadsheets so as to not skew MMB’s bargaining power, she said.

“The Legislature’s role is to make sure that we are funding state government in a way that there is funding available for the contract,” she said. But she did say that the budgets were drawn up to recognize the work of state employees and the need for pay raises after several years of high inflation.

Republicans raised concerns that without the need for legislative approval, governors could bargain high raises for unions and the Legislature would then need to pay for them. Should final contracts exceed the money appropriated, governors would have to return for more money which the legislature could refuse to approve. Generally, though, the financial aspects of contracts are within the budget and agencies have other means to balance their budgets against new contracts.

“A boss is always a boss, a manager is always a manager and they have a fiduciary obligation to negotiate those contracts within the budget parameters,” said Devin Bruce, legislative director for the Minnesota Association of Professional Employees.

Sen. Mark Koran, R-North Branch, objected to taking the Legislature — and in turn taxpayers — completely out of the process. Koran, who was represented by AFSCME as well as MAPE while working at the Department of Revenue, said the approval process brings transparency to contracts. While most attention is paid to the cost of living raise, contracts also include annual step raises for more than half of state workers plus paid time off and other benefits that cost money.

Without the joint committee and the House and Senate hearing those details before approval, transparency is lost, he said. 

“Without that, taxpayers and voters will be less informed with how compensation agreements work,” said Koran, who was one of two lawmakers who sued to block the 2020 pay raises. Governors would not need to return to the Legislature for more money if the contracts they bargain exceed what was appropriated. Instead they could use money set aside for jobs in agencies that are vacant.

When the Murphy bill was before the state government committee, he offered amendments that only if cost of living increases exceeded 2% or 3% would legislative approval be needed. Both failed.

Another unsuccessful amendment came from Sen. Steve Drazkowski, R-Mazeppa, who tried to ban campaign contributions to governors by unions who that office holder would bargain contracts with.

“This makes certain that we don’t have a pay-to-play situation going on in the state of Minnesota,” Drazkowski said.