Senate approves state employee raises contingent on future budget surplus

The Senate Republicans took strategic action to protect both the state employees on the front line of the COVID-19 crisis and the state’s budget with a modified contract approval.

HF2796, authored by Senator Mark Koran, R-North Branch, ratifies the first year of the contract and puts in place a wage freeze for the second year, which begins July 1, 2020.

The 2.5% raise for the second year of the contract would be restored for state employees if the state achieves a budget surplus by July of 2021.

“The whole state of Minnesota is hurting right now,” Koran said. “There are 650,000 people unemployed across the state, businesses are closing for good, and people are losing their livelihoods every day. The bill today is fair to every Minnesotan, both state employees and the taxpayers.”

State employee union contracts were scheduled to provide a 2.5% raise across the board. However, record unemployment and a projected $4 billion loss of revenue over two months have shifted the priorities of the 2020 session.

In a letter written last week to state employee union leaders, Majority Leader Paul Gazelka, R-East Gull Lake, said the pay freeze is necessary in light of a projected budget deficit.

“These are unprecedented times that call for unprecedented solutions. I appreciate that your contracts were negotiated in good faith last year before anyone could imagine the damage a virus could do to our economy and the state budget," Gazelka said. "But in light of recent events, the proposed contracts are not sustainable and if approved as is will lead to greater employee layoffs next year. I don’t want that to happen.”

Without any action by the Senate, state employees would face a 2.25% cut in pay, retroactive to last July.

“That would be completely unfair,” Gazelka said. “State employees are not at fault here. We’re just trying to make the best of what could be a disastrous situation: either face a very harsh pay cut, or layoffs at the state to manage a deficit. Today’s modified ratification is the commonsense, fair solution for every Minnesotan.”