Taxpayers versus Government Workers

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Taxpayers versus Government Workers
Final Senate Vote, Omnibus Government Worker Pensions Bill

Body: Senate | Journal Page: 11344 (Click to view vote.)
Scored? Yes | Right Vote: N
Author: Betzold
Acting on: SF2918 Date: 05/12/2010
Result: Bill Passed 52 - 14

Much is this bill is an exercise in tweaking the valves in the dank old boiler room where the $50 billion Government Pension Machine sits. The union bosses at the controls have changed minute little settings, like cutting the interest rate on refunds from six to four percent and ratcheting back the increase in benefits by half a percent. They've re-tuned state government's largest money machine to make it a tad more efficient - at least until the heat is off.

The few reductions in the increases and increases in the reductions are temporary and subject to change just like every other provision in the laws that government Minnesota government worker pensions. Bookkeeping gimmicks designed to make the funding status of each plan look better on paper include rolling the full funding dates forward (think of your mortgage coming due in a few years and the bank showing you owe more than you should - adding another 10 or 20 years to the due date will make things look much better - or at least postpone any painful decisions).

New Hires
In keeping with the union dogma on Seniority, new state and local government hires get hit hard by the pension changes in SF 2918. They will have longer vesting requirements, lower deferred augmentation rates, lower accrual rates and retention of coverage limits to save some bucks system-wide going forward.

But before we start shedding tears for the new guys, keep in mind that these employees still receive something you only wish you had: A defined benefit pension plan backed by the taxing power of the State. And when the economy starts to turn around post-Obama and the new guys start building seniority and start thinking about their retirement, you can bet they are going to be looking to make up the difference. And if history is any guide, they will succeed.

Increased costs to taxpayers
The big money in pensions is the contribution rate from you, the taxpayer. Know as the "employer contribution," this is the percentage of payroll that the taxpayers are obligated to contribute to each employee's pension account. SF 2918 increased the amount from 15.60 percent to 18.60 for the State Patrol Plan, from 6 percent to 6.25 for the PERA-General Plan, from 14.1 percent to 14.4 percent for the PERA Police and Fire Plan.

For the teacher's retirement plan, basic members (those with much higher state benefits due to their lack of Social Security coverage) receive taxpayer contributions that ramp up two percent from 9.5 percent to 11.5 percent of payroll over four years. For coordinated members (those with Social Security coverage), the taxpayer contribution is increased from 5.5 percent to 7.5 over four years.

(In future articles, BillsandVotes.com will tally up the cost of these contributions. When added to contribution hikes passed nearly every year since 2005, the total new money for state and local pensions will be in the $1 billion range. And that's new money only.)

Contribution rates on autopilot
In addition to direct increase in taxpayer contributions, SF2918 also ramps up the automatic contribution rate hikes allowed under current law. Triggered by funding deficiencies (and, theoretically, funding sufficiencies), the amount of money that taxpayers are legally obligated to contribute will ramp up via the contribution adjustment mechanism. This controversial bit of pension law was passed in a very limited manner a few years back, but was greatly expanded in SF 2918. It used to be that contribution rates, since they are so closely related to government's power to tax, were only done via direct legislative changes in bills passed by the House and Senate and signed by the Governor.

Not anymore. SF 2918 authorizes that under the right circumstances a taxpayer contribution rate hike of up to 0.75 percent of payroll for the teachers plan and the local government plan can be made administratively. The Legislature must take action to stop the increase or it goes into effect with no fanfare.

Decreases in the increases
Deferred annuities augmentation rates: This is the compound interest rate at which an employee's pension assets grow during the period between leaving their government job and collecting a pension. The current rate varies by plan, but can be as high as five percent compounded per year. For several plans, the bill drops that rate to one percent and zero percent after 12/31/2011. If you go straight from Agencyville to retirement, there's no impact.

Annual benefit increases: Plans that offer their retirees an annual increase to stave off inflation will get a smaller bump as long as their funds are in the red. These reductions in increases vary by plan, and are, like all else in Minnesota pension law, subject to change, most likely in an upward manner.

Although you sort of have to read between the lines, the excellent session summaries posted by the Legislative Commission on Pensions and Retirement (LCPR) will give you a full accounting each annual pension bill. Spend some time learning the lingo. It's your money that's being spent, after all.

While the vast majority of private sector employees have seen their 401K plans dry up and blow away - while hardworking taxpayers have had to postpone the secure retirements they deserve - the Governing Class will hardly feel the pea that the down economy has placed under the stack of mattresses they sleep on. Vote Red on SF 2918.

Taxpayers versus Government Workers
Reject Conference Report on Omnibus Pension Bill

Body: House | Journal Page: 12669 (Click to view vote.)
Scored? No |
Author: Buesgens
Acting on: SF2918 Date: 05/12/2010
Result: Motion Failed 32 - 99

Rep. Buesgens made the obligatory motion to refuse to adopt the conference report on the Omnibus Government Worker Pension Bill. He made the point that at the time of the vote the state was $3.1 billion short of a balanced budget. Making union workers whole while leaving a hole in the budget was an irresponsible action to take since the private sector is on the hook for any budget shortfalls. In other words, the so-called public servants can wait a few days. Not scored. See Final Senate Vote on SF 2918 for summary.

Taxpayers versus Government Workers
Final House Vote, Omnibus Government Worker Pensions Bill

Body: House | Journal Page: 12672 (Click to view vote.)
Scored? Yes | Right Vote: N
Author: Murphy, M.
Acting on: SF2918 Date: 05/12/2010
Result: Bill Passed 116 - 16

See: Final Senate Vote, Omnibus Government Worker Pensions Bill

Taxpayers versus Government Workers
Sweetheart Retirement Incentive for the Governing Class - House Vote

Body: House | Journal Page: 12058 (Click to view vote.)
Scored? Yes | Right Vote: N
Author: Solberg
Acting on: SF1481 Date: 05/10/2010
Result: Bill Passed 105 - 27

This bill was on the list to be passed in 2009, but the clock ran out before the conference report could be processed. Early retirement incentives like these are rarely worth the cost. This baby dumps two year's worth of employer (read: taxpayer) contributions into the health care savings account of any state worker who has 15 years of service. As usual the implied need for the bill is to incentivize high-cost seniority matrons to get off of the state payroll. As though they weren't going to retire anyway. After three years pass they are free to come back to work for the state or do consulting work for an agency. (Yes - there are a number of provisions in Minnesota pension law to allow state and local employees to "retire" and then come back to work for the government while also drawing a pension. It's called double dipping.) Note that 2009 GOP conferee Keith Downey was replaced in 2010 with Steve Smith, a long-time member of the Legislative Commission on Pensions and Retirement (LCPR) who is a bit more amenable to pension politics. Downey voted No. We concur. Yet another sweetheart deal for the governing class.

Taxpayers versus Government Workers
Sweetheart Retirement Incentive for the Governing Class - Senate Vote

Body: Senate | Journal Page: 10686 (Click to view vote.)
Scored? Yes | Right Vote: N
Author: Bakk
Acting on: SF1481 Date: 05/08/2010
Result: Bill Passed 46 - 13

See: Sweetheart Retirement Incentive for the Governing Class - House Vote

Taxpayers versus Government Workers
Big Education versus Better Teachers

Body: House | Journal Page: 10069 (Click to view vote.)
Scored? Yes | Right Vote: N
Author: Sertich
Acting on: HF3093 Date: 04/12/2010
Result: Motion Failed 79 - 47

The Sertich motion to lay the Garofalo motion on the table may have been the closest teacher licencing reform would get to the House floor. Garolalo's motion would suspend House rules and allow HF 3093 to be taken from the General Register and passed. Rep. Garofalo took the bull by the horns by stating that union politics were to blame for the lack of reform in teacher licensing. He cited a recent Star Tribune story that documented a growing divide between the DFL and Education Minnesota. In addition to pension funding, the two political allies were at odds over federal Race to the Top funding that would mandate licensing reform in order to qualify. The bill provided the necessary reform by requiring the Board of Teaching to approve a two-year limited-term license. Vote Red on the Sertich/Education Minnesota motion to kill teacher licensing reform.

Taxpayers versus Government Workers
Final Senate Vote, Lower Judgement Interest Rates for Government

Body: Senate | Journal Page: 9341 (Click to view vote.)
Scored? Yes | Right Vote: N
Author: Skoe
Acting on: SF2722 Date: 04/12/2010
Result: Bill Passed 44 - 18

See final House vote summary. Vote Red.

Taxpayers versus Government Workers
Government Workers Still Living the Highlife in Agencyville

Body: Senate | Journal Page: 9549 (Click to view vote.)
Scored? Yes | Right Vote: N
Author: Metzen
Acting on: SF2386 Date: 04/12/2010
Result: Bill Passed 48 - 16

SF 2386 is the legislation by which the House and Senate ratify the state union contracts and the state compensation plans for the few state employees who are not given union protection. It has taken years of state deficits and hard line negotiation by the Pawlenty administration to obtain pay and benefit levels that have at least some relation to the terrible economic reality outside the cushy confines of Agencyville. This three page bill ratifies 11 union contracts and 7 non-union compensation plans for roughly 42,000 state workers. New costs for the biennium are $39.5 million. The bill is the tip of the contract negotiation iceberg and is backed by many fiscal notes and thousands of pages of union contracts and memos of understanding. Click here for the online versions of the contacts. Click here for the legislature's cost summary documents.

One jaw-dropping feature in the 2010 - 2011 contracts is the absence of across-the-board increases as shown in the most recent settlement sheet. That may be a bit misleading as some step and lane increases are granted in some contracts as noted in the meeting materials for June 29, 2009 and Dec. 16, 2009. Given the realities of life outside of Agencyville, these contracts, although much more responsible than previous ratifications, are far too costly. Don't forget all the sick leave, vacation time, the defined benefit pensions, early retirement options, great health benefits, low work load, etc... Vote Red to send a signal that the days of the public sector being a burden on those they supposedly serve are over. NOTE: Failure to pass this bill would put the state in danger of reverting back to the more costly current contacts. But so be it - all the better to highlight the issue to the voters.

Taxpayers versus Government Workers
Final House Vote, Lower Judgement Interest Rates for Government

Body: House | Journal Page: 9861 (Click to view vote.)
Scored? Yes | Right Vote: N
Author: Marquart
Acting on: SF2722 Date: 04/08/2010
Result: Bill Passed 87 - 43

The House version of SF 2722 modifies the interest rate paid to the prevailing party in any judgement, award or verdict involving the state or a political subdivision. The Legislature last year moved the interest rate from roughly four percent (tied to the interest rate paid on Treasury bonds) to ten percent on all judgements over $50,000. SF 2722 moves the interest rate back to the roughly four percent paid prior to the 2009 change. The operative language is: "For a judgment or award over $50,000, other than a judgment or award for or against the state or a political subdivision of the state, the interest rate shall be ten percent per year until paid." Sweet deal for units of government in Minnesota. Private entities still have to cough up a ridiculously high interest payment. Vote Red.

Taxpayers versus Government Workers
$50 Fine for Winning in Data Practises Hearing

Body: House | Journal Page: 9895 (Click to view vote.)
Scored? Yes | Right Vote: Y
Author: Buesgens
Acting on: HF2899 Date: 04/08/2010
Result: Amendment Defeated 49 - 81

The Buesgens amendment deletes the $50 retained by the Office of Administrative Hearings (OAH) when a filing fee is refunded to a substantially prevailing complainant in a Chapter 13 data practises hearing. If a citizen takes the government to court over an issue and wins, they shouldn't have to pay a fine. Vote Green.

Taxpayers versus Government Workers
Revert to Pre-2009 Judgement Interest Rates

Body: House | Journal Page: 9860 (Click to view vote.)
Scored? Yes | Right Vote: Y
Author: Kohls
Acting on: SF2722 Date: 04/08/2010
Result: Amendment Defeated 50 - 80

The Kohls amendment undoes the changes made in 2009. A post-judgement interest rate of ten percent also affects private businesses and the change passed in 2009 did not get an adequate hearing in committee prior to being added to an omnibus bill. Ten percent interest is a very steep penalty in the current economy and goes well beyond a reasonable rate of return. Vote Green.

Taxpayers versus Government Workers
Sharing the Pain: State Employee Pay Cuts to Avoid Layoffs

Body: Senate | Journal Page: 9283 (Click to view vote.)
Scored? Yes | Right Vote: Y
Author: Limmer
Acting on: SF2386 Date: 04/06/2010
Result: Amendment Defeated 19 - 43

The Limmer amendment offers a simple way for the state government worker unions to avoid having to lay off any of their comrades. It provides that if the union contracts being ratified in SF 2386 raise state costs to the point that would require layoffs, the Commissioner of Finance "may request the exclusive representatives of the employees covered by the agreement to negotiate an amendment to the agreement that would allow the commissioner to use unpaid leave and reductions in hours in lieu of layoffs."

Sen. Limmer said a 10 percent reduction in all state salaries would net a savings to the state of about $900 million. No one would lose their job and the state would be well on its way to a balanced budget. What an elegant and thoughtful way of saving state employees the pain of losing their jobs and their health insurance, right? In bad economic times public servants would certainly be willing to endure a little short-term pain in order to maintain some stability for others. Er, wait a minute, bub. Vote Green.

Taxpayers versus Government Workers
First Senate Vote, Local Government Salary Reporting

Body: Senate | Journal Page: 9110 (Click to view vote.)
Scored? Yes | Right Vote: N
Author: Kubly
Acting on: HF3327 Date: 03/29/2010
Result: Bill Passed 59 - 8

Taxpayers are justified in their curiosity about the pay and benefits of government workers. The more disclosure the better. Under current law cities and counties with a population of more than 15,000 must notify their residents of the positions and base salaries of their three highest paid employees. HF 3327 exempts employees of city or county-owned hospitals from this requirement, mostly on the grounds that hospital employees, namely doctors, have high salaries and don't want to work at a place if it means their salary will be made public. The Senate voted the first time on the Senate language, which specified that only "a practitioner, as defined by section 151.01, subdivision 23, in a city-owned or county-owned hospital" would be exempted from the reporting requirement. As in the House bill, pass this exemption and the race will be on to exempt many more employee groups. This bill would eventually be vetoed by Gov. Pawlenty. Vote Red.

Taxpayers versus Government Workers
Final Senate Vote on Richfield Firefighter Response Time

Body: Senate | Journal Page: 9109 (Click to view vote.)
Scored? No |
Author: Kelash
Acting on: HF2729 Date: 03/29/2010
Result: Bill Passed 67 - 0

Where there's smoke there's fire and hopefully there's also some firemen. Of course firemen should be required to live within a few minutes of their firetrucks. But there are no residency requirements for firemen because their union opposes them. It's that simple. Under HF 2729, Richfield firemen would be required to live close enough to the city to allow them to get to the fire station within ten minutes. Makes perfect sense, right? It would if the bill wasn't so oddly written. It only effects new hires and only for the first ten years of employment. And the law expires in seven years unless the sunset is repealed by the Legislature. A half-baked measure that seems more about union seniority than public safety. Not scored.

Taxpayers versus Government Workers
First Senate Vote, Lower Judgement Interest Rates for Government

Body: Senate | Journal Page: 9251 (Click to view vote.)
Scored? No |
Author: Skoe
Acting on: SF2722 Date: 03/29/2010
Result: Bill Passed 66 - 0

This version of SF 2722 put the interest rate for property tax adjustments for or against a unit of government at roughly four percent ("based on the secondary market yield of one year United States Treasury bills, calculated on a bank discount basis as provided in this section"). No scored.

Taxpayers versus Government Workers
A Met Council Tax Increase

Body: House | Journal Page: 9586 (Click to view vote.)
Scored? Yes | Right Vote: N
Author: Gardner
Acting on: HF2949 Date: 03/25/2010
Result: Bill Passed 88 - 44

HF 2949 helps bail out the Met Council by creating a thing called the sewer availability charge (SAC). Money collected is to be deposited in the Council's wastewater reserve capacity fund. The bill grants the unelected Met Council the authority to raise taxes, in effect, by requiring that "If the council reduces the SAC transfer amount for the next fiscal year, the council must then increase the metropolitan sewer availability charge not less than the greater of six percent or the annual percentage change in the Consumer Price Index for the metropolitan region for the previous year plus three percentage points." Vote Red.

Taxpayers versus Government Workers
Special Protection for Unionized State Workers

Body: Senate | Journal Page: 9003 (Click to view vote.)
Scored? Yes | Right Vote: N
Author:
Acting on: SF271 Date: 03/25/2010
Result: Bill Passed 46 - 10

Having been shut out of the governor's office for decades, Minnesota Democrats have developed a loathing for the person who occupies the office and for the handful of non-union, unclassified employees that help implement the governor's policies. This early engrossment of SF 271 amends the state whistleblower statute to carve out a new protection that applies only to unionized state workers. As if this lot needs any more job security, right? The change basically allows these workers to huddle with their partisans in the House and Senate to talk about how the governor is putting together the budget, as in information "that relates to state services, including the financing of state services." No actual wrongdoing is being revealed by these staffers. They are simply being granted a special legal protection for ratting out the governor. In effect, the change would force the executive branch of state government to share these employees with the legislative branch. Vote Red.

Taxpayers versus Government Workers
The P-Word Again!

Body: House | Journal Page: 9585 (Click to view vote.)
Scored? Yes | Right Vote: Y
Author: Buesgens
Acting on: HF2949 Date: 03/25/2010
Result: Amendment Defeated 46 - 86

The Buesgens amendment would require the Metropolitan Council to turn over the administration, operation and maintenance of the metropolitan disposal system to a private company. The Met Council would still set fees and rates and would still own the system, but day-to-day operations would be privatized. Vote Green.

Taxpayers versus Government Workers
Helping MnSCU Figure Out How to Put Its Pants On

Body: House | Journal Page: 9592 (Click to view vote.)
Scored? No |
Author: Haws
Acting on: HF3164 Date: 03/25/2010
Result: Bill Passed 113 - 19

During debate on this bill the outwardly jovial Larry Haws revealed the seething contempt that all liberals struggle so hard to suppress when they're out in public. He flared up like arthritis at Rep. Buesgens' apparent lack of sympathy for the plight of the poor confused MnSCU administrators. Despite the theatrics, there's no denying that Rep. Buesgens had made a valid point about a bill to require the state college system to seamlessly transfer credits between campuses. If things are so chaotic at MnSCU that the Legislature has to go through the effort of passing a new state law on the matter, then maybe there's a much bigger problem. The bill would eventually be vetoed. Not scored.

Taxpayers versus Government Workers
First House Vote, Local Government Salary Reporting

Body: House | Journal Page: 9551 (Click to view vote.)
Scored? Yes | Right Vote: N
Author: Koenen
Acting on: HF3327 Date: 03/24/2010
Result: Bill Passed 94 - 39

Taxpayers are justified in their curiosity about the pay and benefits of government workers. The more disclosure the better. Under current law cities and counties with a population of more than 15,000 must notify their residents of the positions and base salaries of their three highest paid employees. HF 3327 exempts employees of city or county-owned hospitals from this requirement, mostly on the grounds that hospital employees, namely doctors, have high salaries and don't want to work at a place if it means their salary will be made public. Pass this exemption and the race will be on to exempt many more employee groups. This bill would eventually be vetoed by Gov. Pawlenty. Vote Red.

Taxpayers Versus Government Workers