Two-year state employee contracts that include upcoming raises will remain in effect under a decision by DFL Gov. Tim Walz’s administration that is sure to rile his political rivals.
The Legislature ended its session Sunday without passing a joint bill to ratify the agreements. The DFL-led House signed off, but the Republican-controlled Senate voted to make its approval contingent on withholding a 2.5 percent raise due to take effect in July.
The decision left employees in doubt, and could have led to immediate pay cuts if the agreements had been deemed invalid.
In a memo to state employees and a public statement Wednesday, Minnesota Management and Budget Commissioner Myron Frans said lawmakers only have the power to approve or reject the contracts, not modify them.
“This is an unusual situation which required a thorough legal review,” Frans wrote. “Although the Senate chose a path that is not outlined in law, the legal effect of the Legislature’s action is to ratify the agreements that we negotiated in good faith and the compensation plans. MMB will implement them as submitted to the Legislature.”
Republicans argued that the raises were unaffordable at a time when COVID-19 fallout has damaged the state budget. Minnesota is facing a projected $2.4 billion deficit through next year, a sharp turn from the surpluses that were forecast when the deals were struck.
Frans said the Walz administration will work to bring the budget into balance. It has already imposed a hiring freeze, ordered pay cuts for top officials, plans to leave open slots unfilled and could seek layoffs.
“Minnesotans are counting on us to continue being thoughtful and smart about how we balance our budget,” Frans wrote. “We will continue to work with the Legislature to develop practical and strategic solutions to adjust the state budget, especially as we confront the many unknowns of this global pandemic.”
The contracts did make other benefit changes that pushed some health care costs onto employees. But there is also a new $15 minimum hourly wage — although most state workers earn more — and some college loan repayment incentives.
Julie Bleyhl, executive director of the American Federation of State County and Municipal Employees Council 5 — the largest public employee union — said the administration’s decision should be celebrated by public employees.
“The actions taken by Gov. Walz today to move forward with implementing the labor contracts that we negotiated in good faith shows his strong commitment to protect collective bargaining rights and the law,” Bleyhl said.
A similar implementation scenario occurred a few years ago when the Legislature included ratification in a broader bill that then-Gov. Mark Dayton, also a DFLer, vetoed. Frans was commissioner then as well and ruled that the Legislature’s votes alone amounted to ratification.
Republicans threatened legal action but never went forward.