Contract, pension reform, MNLARS Legislative update

Legislative update 3/26/18

Contract and pension reform bills move to Senate floor
On March 20, Sen. Jeremy Miller presented Senate File (SF) 3154 to ratify the 2017-2019 state public employee contracts to the Senate Committee on State Government Finance and Policy Elections. After a discussion from the Senate Republicans regarding concerns about the cost of the contract in future bienniums and state employees receiving too many benefits, the bill was re-referred to the Committee on Finance on a voice vote.

Committee on Finance took up the bill on Thursday, March 22. The bill was amended to include the Minnesota Nurses Association contract and the state personnel plan for administrators. Sen. Michelle Benson raised concerns over using the health care savings from the plans to reduce the overall costs of our plans, while Sen. Torrey Westrom renewed his complaints from the State Government Finance Committee regarding the costs of paying our members the salaries they deserve. The bill passed on a voice vote, with Sen. Westrom being the lone dissent, to await action on the Senate floor Monday morning. Sen. Jeremy Miller renewed the Senate’s commitment to passing the contracts before the Easter/Passover break, which begins March 30. Rep. Marion O’Neill has introduced the House companion SF 3154, House File (HF) 4067. No action has been taken on the bill, and we anticipate the House will instead take up the Miller contract bill early this week.

SF 2620 (Rosen), the pension reform bill, was heard Monday, March 19, in the Senate State Government Finance Committee and Thursday, March 22, in Senate Finance. On both occasions it was well received as a much needed fix to an impending issue, and on both occasions received unanimous support. It now heads to the Senate floor for full consideration Monday morning. The House companion has not moved, but an informational hearing on the legislation was provided in the House Government Operations and Elections Policy Committee two weeks ago. We may see further action on the pension reform bill this week.

Anti-labor bills receive hearings and move forward
With the first policy deadline looming, the legislature began their annual attack on collective bargaining rights. On March 20, Sen. Michelle Benson brought her bill, SF 3417, requiring MMB and labor to submit their negotiated health insurance benefits separately from the rest of the contract. This would not only cause incredible delays in the bargaining process, but as MAPE’s Richard Kolodziejski testified in state government Finance Committee hearing, it directly undermines our rights to negotiate the terms and conditions of employment with our employer. The legislation follows a pattern in which the Republican-controlled Legislature is attempting to interject itself into the bargaining process and erode the rights we possess under PELRA.

In the same hearing, Sen. Jeremy Miller discussed his bill, SF 3540, which would require that all state contracts need to be signed into law to take effect. This is in response to last year’s special session where the Legislature attached pre-emption to the Minnesota Government Engineers Council's contract and the paid parental leave (PPL) MOUs. The bill was vetoed by Gov. Mark Dayton, but both the contract and PPL went into effect because labor contracts need only legislative approval, as the contracts are neither a law, and they’ve already been approved by the executive branch prior to submission to the legislature for approval. Sen. Miller’s bill would permit the Legislature to attach anti-labor provisions to our contracts and use them as political bargaining chips by forcing the governor to sign all of it into law. Both bills were approved and sent to the Senate floor.

The House Government Operations and Elections Policy committee heard HF 3518 (O'Neill) late Thursday evening. The bill prevents employees from receiving step increases and pay raises unless that employee receives an annual performance evaluation and receives a meets or exceeds performance expectations on that evaluation. Furthermore, it directs Minnesota Management sand Budget (MMB) to set different caps on those raises, which violates our right under PELRA to negotiate those compensation rates with our employer. Under our contract, management may withhold a step increase if an employee’s job performance does not meet expectations.

As the legislation proposed by Rep. O’Neill is very poorly drafted, it either intentionally or accidentally makes two massive changes to our contractual rights. First, the bill does not provide a grievance procedure under which an employee may appeal the decision of management to withhold a pay raise. And second, the broad language permits management to reduce an employee’s salary. MAPE raised these issues in the committee hearing Thursday and, while Rep. O’Neill stated that was not her intent, she did not move to correct these issues nor did she promise to work with labor to remedy the problems. Furthermore, Rep. O'Neill failed to take into account that annual performance reviews are not always provided by supervisors, and there is nothing in the legislation that would compel supervisors to provide employees an opportunity for an annual review. The bill was approved by a roll call vote of 11-7 along party lines and sent to the House State Government Policy and Finance Committee.

The last bill presented Thursday evening was the paycheck deception legislation introduced by Rep. Steve Drazkowski. HF 3723 prohibits any state employer from deducting fair share fees or voluntary PAC contributions from an employee’s check if that employee is represented by a bargaining unit of 10,000 members or more. He argues that public employees should not be required to pay fair share fees that may be used for political purposes, and that public employers should not be allowed to facilitate that transfer for labor groups of certain sizes. What he fails to mention is that fair-share fees are already prohibited from being used for political purposes listed in his bill, and labor organizations must conduct an audit and certify with the Bureau of Mediation Services annually to ensure the fair-share fees being assessed are correct. Rep. Drazkowski is merely trying to weaken public sector unions by creating more barriers for labor organizations to ensure their members have a voice in the political process. The bill passed 10-8, with Rep. Randy Jessup as the only Republican to vote against the anti-labor legislation.

MNLARS receives critical funding
A conference committee convened Thursday morning to finalize the details of a one-time $9.65 million appropriation to the Department of Public Safety to continue working on the vehicle registration system, and $350,000 to provide legislative oversight on how the money is spent and whether progress is being made. The appropriation, coming from the driver and vehicle services operating accounts, would largely be used to retain the contractors working on the fixes who were served 30-day layoff notices on March 1. The money is just a piece of the $43 million request to resolve the issues. Gov. Mark Dayton signed the short-term funding measure on Thursday evening. We will be providing updates as the remaining funding request is brought forth.

Legislative update 3/16/18
As the Legislature heads into deadline week where all bills must receive a hearing within their house of origin, we have now seen the governor’s budget proposal following Governor Dayton’s final state of the union address. The governor has set four key priorities to end his second term including long-term fiscal stability, continued investment in Minnesota’s youngest learners in preK, cutting state income taxes for two million Minnesotans along with improving family budgets without risking the state’s budget stability and establishing a MinnesotaCare Buy-In program to provide better health care for an estimated 100,000 Minnesotans. However, for MAPE, the attacks on unions continue into 2018 with great risk.

Below are several updates to key legislation we will be targeting in the coming week:

MAPE contract
Two bills that include both MAPE’s and AFSCME’s contracts have been introduced in the state House. These bills are House File (HF) 2933 authored by Rep. Debra Hilstrom, (DFL), and HF 3031 authored by Rep. Jason Metsa (DFL). HF 2933 was brought up on the House floor the first week of session and held over there to possibly be brought up at a later time.

The bipartisan bill, Senate File (SF) 3154, authored by Sen. Jeremy Miller, approving most of the labor agreements and plans was introduced in the Senate this past week. It can be found here: https://www.revisor.mn.gov/bills/text.php?number=sf3154&version=latest&session=ls90&ssn=1&y=2018 This bill will be heard at the Senate State Government Finance and Policy and Elections Committee at 1 p.m. Tuesday, March 20, in room 1200 of the Senate building.

Pensions
The pension reform bill SF 2620 (Rosen)/ HF 3053 (O’Driscoll) has been assembled after three years of effort and two vetoes. The Legislative Pension and Retirement Commission has adopted a comprehensive measure to address the financial stability of public employee pensions for over 500,000 active and retired public employee. This bill:

• Provides a $6 billion reduction in current and future pension costs by lowering the COLA’s to retirees, reducing benefits for deferring retirees and increasing employee contributions.
• Provides $2 billion in direct state aid over 30 years so Minnesota can keep the promises made to employees and retired workers.
• The State of Minnesota will see a $2 billion reduction in its pension liabilities.
• This legislation is supported by all groups representing public employees and public employers. Over 25 employer and employee groups have signed onto a letter in support of this legislation.
• The Governor funds the pension systems with $27 million in 2019 and $110 million over the next biennium.
• Over the past week, this legislation has passed the Legislative Pension and Retirement Commission as well as the Senate State Government Finance and Policy and Elections Committee with unanimous and bipartisan support.

Some of the key elements included in this legislation are:

• Elimination of subsidies in the calculation of early retirement benefits.
• Changes in actuarial assumptions for investment rate of return from 8 to 7.5 percent.
• Elimination of deferred augmentation or interest paid to a retiree who postpones retirement benefits until a later age.
• Elimination of the COLA until a retiree reaches normal retirement age.
• Reduce COLAs for retirees from 2 percent to 1 percent for five years and 1.5 percent thereafter.
• Contribution increases of .25 percent in 2019 and in 2020 for employees, and .375 percent each of the two years for employers. Correctional plan employees will see a .5 percent increase while the employer will experience a 6 percent increase spread over the next four years.
• Resetting the amortization period to 2048.

The correctional plan is currently funded at 68 percent and is facing similar challenges. Recommended changes to the correctional plan include:

• Elimination of subsidies in the calculation of early retirement benefits.
• Changes in actuarial assumptions for investment rate of return from 8 to 7.5 percent.
• Elimination of deferred augmentation or interest paid to a retiree who postpones retirement benefits until a later age.
• Elimination of the COLA until a retiree reaches normal retirement age.
• Correctional plan employees will see a .5 percent increase while the employer will experience a 6 percent increase spread over the next four years.
• Resetting the amortization period to 2048.

Right to work
Rep. Steve Drazkowski has authored a right to work bill linked here: https://www.revisor.mn.gov/bills/text.php?number=HF3779&version=0&session=ls90&session_year=2018&session_number=0&format=pdf

This bill authorizes employees the right not to pay their fair share dues while obtaining benefits of a union. There has not been any hearing announced on this legislation.

MNIT Services
On Tuesday, March 20, at 10:15 a.m. in the basement hearing room of the State Office Building, the House Government Operations and Elections Policy Committee will hear HF 3570 authored by Rep. Jim Nash. This legislation requires all state information technology projects to be outsourced to vendors. Legislation can be found here: https://www.revisor.mn.gov/bills/text.php?number=HF3570&version=latest&session=ls90&session_year=2018&session_number=0

Payroll deduction discontinuation
Rep. Steve Drazkowski has authored HF 3723 preventing the state from being able to deduct dues from payroll for any selected PAC sign-ups or political fund purposes, which currently allow MAPE and other unions to establish a supporting mechanism for elections and legislators who support the freedoms to belong to a union and join together with coworkers to have a united voice. This bill will be heard on Thursday in Government Operations and Elections Policy Committee in the Basement Hearing Room at 10:15 a.m. Thursday, March 22. You can read the bill language here: https://www.revisor.mn.gov/bills/text.php?number=HF3723&version=latest&session=ls90&session_year=2018&session_number=0

Legislative update 3/7/18

Contract update

Two bills that include both MAPE’s and AFSCME’s contracts have been introduced in the state House. These bills are House File (HF) 2933, Rep. Debra Hilstrom, (DFL), and HF 3031, Rep. Jason Metsa (DFL). HF 2933 was brought up on the House floor the first week of session and held over there to possibly be brought up later. HF 3031 is not scheduled for a hearing, but it would be available to move through the normal committee process and amend additional labor contracts into the bill as they are prepared to move through the legislative process.

Thanks to everyone who participated in our Twitter video submission request and wrote letters to their legislators. We are starting to deliver your letters and have been receiving positive feedback from some of the legislators who have received them.

Pensions
The Pension Commission heard final testimony on its omnibus bill last night (Tuesday) containing several sustainability measures that will help secure the defined benefit plans into the distant future. These measures will put the plans on a path to be 100 percent funded by the year 2048. There are benefit reductions shared among active, deferred and retired participants. There are increased contributions for both the employer and employees as well as appropriations and direct state aid. Over the course of the next 30 years, the employer’s increased contributions of $2.1 billion into all the pension funds will be met with $6.1 billion in cost savings and employee contributions.

The bill contains the following:

• Elimination of subsidies in the calculation of early retirement benefits.
• Changes in actuarial assumptions for investment rate of return from 8 to 7.5 percent.
• Elimination of deferred augmentation or interest paid to a retiree who postpones retirement benefits until a later age.
• Elimination of the COLA until a retiree reaches normal retirement age.
• Reduce COLAs for retirees from 2 percent to 1 percent for five years and 1.5 percent thereafter.
• Contribution increases of .5 percent in 2019 and in 2020 for employees and .75 percent each of the two years for employers. Correctional plan employees will see a .5 percent increase while the employer will experience a 6 percent increase spread over the next four years.

This bill still needs to travel through the normal committee process and will likely be considered for passage during the final week of the legislative session. Leadership in the House has been noncommittal about passing this as a clean bill with nothing added to it, which caused the governor’s veto of the pension bill in 2017.

MNIT
State Sen. Julie Rosen (GOP) introduced a bill this past Monday that provides significant changes to MNIT by eliminating the agency and placing it under the oversight of the Department of Administration. The MNLARS oversight and cost has created significant problems for legislators who are being asked to invest tens of millions more into the project that was expected to be finished. This bill followed months of hearings on the MNLARS project and a legislative decision not to authorize continued funding. Right now, contractors working on the project are receiving layoff notices. Urgent repairs for MNLARS, without urgent funding provided, could be delayed for up to two years. The House Transportation Finance Committee did pass a bill that reduces most agencies by a total of $10 million and applies it to the maintenance, development and operations of MNLARS. However, it still has several steps to go before it can become law and will need even more funding to be completed.

We feel that legislators understand that the problem exists within the contractors, but that they remain concerned with oversight. We will continue having extensive conversations about this bill moving forward. As written, it allows significantly more outsourcing than necessary of state IT services.

Anti-labor legislation
Only a couple of weeks into the legislative session, GOP legislators have already authored several anti-labor bills and amendments. We have seen a bill introduced that limits telecommuting by state employees. Another bill requires health and dental insurance bargaining agreements to go through the Subcommittee on Employee Relations, which allows benefits to now be used as a political pawn in the same way our contract has been treated. Amendments to the contract bill included making dues optional.

There have been a handful of additional anti-labor bills introduced as well. We will keep everyone posted if these bills make progress.

Day on the Hill
With approximately 215 MAPE employees and retirees registered for Day on the Hill, we need as much of a push to register people as we can. The deadline for registration is 5 p.m. this Friday. We need a bigger showing to push for the key things state employees need from this legislative session, including our contract, a pension bill and any additional items that come up between now and then.

For more info or to sign up for Day on the Hill, go here: www.mape.org/mape/news/our-day-hill-march-21

Legislative update 2/28/18

Here's an update on our contract
On Thursday, Feb. 22, Rep. Deb Hilstrom (DFL) made a motion to suspend the House rules, declare an emergency and give our contract bill, House File 2933, second and third readings. A vote on the third reading would normally pass any bill out of the House. It is very rare to see this happen to any bill bypassing the committee process. The vote to suspend the rules was unanimous. The purpose of bringing this forward now was to raise the need to support state workers and provide them with a fair contract containing a modest increase before passing a legislative budget and providing an increase for themselves after it was vetoed last year.

Unfortunately, Rep. Marion O'Neill (GOP) offered an amendment to the bill that included several anti-labor provisions. The provisions included voluntary union contribution language (elimination of fee-payer) and a provision requiring a full majority of the votes of the Subcommittee on Employee Relations to implement any contract which differs from the current language allowing for a tie vote or implementation if the Subcommittee does not meet within the 30-day timeframe. Part of the amendment included the addition of three contracts that were implemented recently as a result of the Subcommittee not meeting (including corrections officers and 911 operators).

Rep. Hilstrom made a motion to divide this amendment. The division of the amendment happened in such a way that the first vote was to amend the additional contracts into the original bill with MAPE's and AFSCME’s contracts. That vote was 111-17 in favor of the amendment. This vote signifies the support for state workers that exists within the Legislature that is nullified for the majorities own political gains. Then, the first part of the amendment was before the House for a vote. Before the majority could vote to include any anti-labor language into the bill, Rep. Hilstrom moved to lay the bill on the table. That motion passed on a voice vote. House File 2933 sits now until a motion is made to remove it from the table for a vote.

MAPE is continuing with all of their work on the contract at this point including focusing on getting a large showing for Day on the Hill for March 21. If you would like more information or to register for Day on the Hill, please go to: www.mape.org/mape/news/our-day-hill-march-21