Final Deal Reached
Just prior to midnight on Sunday 5/16/2010, the Legislature and Governor reached a deal putting an end to the 2010 legislative session scheduled for adjournment the following day. Unfortunately, there was not enough time to properly prepare the legislation before the midnight bill deadline. The Governor agreed to call a special session at 12:01 A.M. to allow the legislature to finish up the final budget bill.
The budget fix balanced the nearly $3 billion biennial budget deficit through cuts. The bill ratified the $2.7 billion in illegal unallotments Governor Pawlenty made last year. It included a variety of cuts to health and human services programs, and authorized the delay of corporate and sales tax refunds to help manage the state’s cash flow.
There are several more key provisions in the agreement.
- General Assistance Medical Care would get a $10 million boost to help fund rural care for GAMC patients.
- Governor Pawlenty or the next governor of Minnesota may opt in to an early expansion of Medicaid enrollment. This program allows Minnesota to collect nearly $7 dollars for every $1 of state money spent. Governor Pawlenty and GOP candidate for Governor Tom Emmer have said they will not opt into the program as Republican legislators referred to it as Obamacare.
- It allows a potential $408 million in enhanced Medicaid match funds to be used to bolster the state’s cash flow, if Congress appropriates the money.
- No surcharges will be passed on to health care providers.
- Many state agencies took an additional 1.5% cut to their budget.
The bill does not take $30 million, originally proposed by the Senate at 2 A.M, from the state employee group insurance program to be paid back in 2012 after MAPE’s next contract negotiations would be completed. Fortunately while the conference committee was held up, State Representative and House Tax Committee Chair Ann Lenczewski was successful in amending the final bill to get the $30 million by delaying refunds of overpayments of corporate franchise and sales tax including capital equipment refunds.
So, on Monday, the House passed the bill 97-32 while the Senate passed it 52-14. Both bodies subsequently adjourned sine die. The bill now goes to Pawlenty, who said he will sign it. _______________________________________________________________________________________________
Many pieces of legislation impacting MAPE members were acted upon at the very end of the legislative session. Below are some updates on legislation impacting MAPE members. Check back over the next two weeks. Any bills sent to the governor for a signature in the final three days of session have two weeks to be signed by the governor. So, as bills are signed or vetoed, I will be sure to update this report.
Early Retirement Incentive Passes
The early retirement provision that MAPE and AFSCME have been working on was passed and signed into law on Saturday, May 15th. Under this bill, employees of the executive, legislative, or judicial branch of state government, the Public Employees Retirement Association, the Minnesota State Retirement System, the Teachers Retirement Association, or the Minnesota State Colleges and Universities may have their appointing authority deposit up to 24 months of the employer health and dental insurance contributions into the employee's account in the health care savings for the employee's if you retire before June 30th, 2011.
This bill is entirely at the employer's discretion. For more specific language on the bill, click here.
MAPE Contract Gets Passed into Law
S.F. 2386 authored by Sen. Metzen and H.F. 2758 ratifying the MAPE 2009-2011 collective bargaining agreement, passed their respective legislative bodies and was signed into law by the Governor.
State Operated Services Redesign Delayed
The Health and Human Services budget delayed massive job cuts by providing large amounts of funding for State Operated Services and delaying a planned and partially implemented reorganization. This bill was passed and quickly vetoed by the governor. The majority of the bill was later agreed upon in final negotiations that led to the end of the legislative session. The bill includes the following provisions dealing with State Operated Services (SOS):
- Allow the number of beds at Cambridge to be reorganized into two 16 bed facilities; one for individuals with development disabilities (DD) and one for individuals with DD and co-occuring mental illness. Remaining beds must be converted into community–based transitional intensive treatment foster homes in Cambridge staffed by state employees.
- METO funding is $7m in FY2011, and $2m in FY 2012 and 2013. Funding used to convert METO to community-based services staffed by state employees including: psychiatric extensive recovery treatment services, intensive transitional foster homes as enterprise activities, and other community-based services.
- No-layoff language statute was not repealed.
- Anoka redesign is to be done by the Advisory Task Force on State Operated Services including a MAPE representative.
- Anoka – requires the Commissioner of Human Services to develop services in the metro area. Savings generated as a result of transitioning patients from Anoka to community-based services may be used to fund supporting housing staffed by state employees.
- SOS Dental – Brainerd, Cambridge, Faribault, Fergus Falls and Willmar are funded with $700,000 for FY 2011.
- Eveleth funding will be $106,000 in FY 2011 and $44,000 in FY 2012. Funding will be used to maintain the building until the lease expires and establish a psychiatric intensive therapeutic foster home as an enterprise activity in the same building, pending Federal approval.
- Wadena and Willmar – $450,000 to delay transitions to re-staff, reopen, and operate at hospital level care until 6/30/2011 and convert to psychiatric extensive recovery treatment services after 6/30/2011.
- Mankato - $600,000 per year in ongoing funding for a community collaborative for crisis services, recruiting former employees of Mankato Crisis Center recently laid off. Legislative approval is required to discontinue funding.
- Brainerd funding is $2.8m in FY 2011 and $1.4m/yr ongoing to convert the hospital to neurocognitive psychiatric intensive treatment service.
- The DHS Commissioner is required to implement changes to save $6,006,000 including maximizing budget savings through strategic employee staffing and implementing cost reductions in cooperation with SOS employees.
- An amendment passed and put in the bill states, “If the closure of a state-operated facility is proposed, and the department and respective bargaining unit fails to arrive at a mutually agreed upon solution to transfer affected state employees to other state jobs, the closure of the facility requires legislative approval. This does not apply to state-operated enterprise services.”
- Over $2m in funding for each of the next three fiscal years to fund redesign lost revenue.
- No reduction to SOS Operations.
- $4 million in SOS Operating Budget cuts in each of the FY 2012 and 2013 years.
Other Notables from the bill:
- $2.5 million in DHS Operating Budget cuts in each of the FY 2012 and 2013 years.
- Over $400,000 in MSOP service cuts for Corrections in FY 2012 and 2013.
- Cancellation of the $145,000 interagency agreement with DOC for chemical dependency treatment.
MSRS Changes Become Law
The pension omnibus bill which took steps to fully fund MSRS’s General and Correctional Plans was signed into law late Saturday night. Despite comments from the Governor’s spokesperson to the contrary, the Governor held up a bipartisan approved pension bill for negotiations until the final minutes in which he was required to sign or veto the bill.
The changes to the General Plan include:
- Lowering future post retirement benefit increases from 2.5% to 2% beginning in 2011.
- Requiring a waiting period for post-retirement adjustments. Rather than a prorated increase for employees hired during a year, only employees retiring before July 1, will be eligible for the prorated increase.
- Interest paid on refunds from the fund would decrease from 6% to 4%.
- Members who retire and plan to collect a deferred benefit will see their benefit decrease from 3% per year until their 55th birthday to 2%. Increases after their 55th birthday will be reduced from 5% to 2%.
- Interest on benefits for retirees who return to state service covered by MSRS would be eliminated.
- Vesting would be increased from 3 years to 5 years for future hires.
The changes to the Correctional Plan include:
- An increase in the early retirement penalty from 1.2% each year to 2.4% for current employees under age 55. For future hires, the penalty would increase from 2.4% to 5%.
- The retirement formula for future employees will be reduced from 2.4% to 2.2% for each year of service.
- Correctional employees hired after June 30th 2010, will become vested at 50% after 5 years and 10% for each additional year up to 100%.
The actual language of the bill can be found by clicking here.
Whistleblower Changes Vetoed
A bill passed the legislature allowing an employee in the classified service of state government to communicate information relating to state services or its finances to a legislator, the legislative auditor or a constitutional officer. The employer would have been prevented from taking any action against those employees. However, following passage of the bill, Governor Pawlenty vetoed it. In his response, Governor Pawlenty stated, “The new provision in Chapter 43A requires a classified state employee to keep information learned from a legislator or legislative staff confidential from the Executive Branch.” To read the veto letter in its entirety, go click here.
Government Efficiency Bills
The bill establishing a Service Innovation Commission was amended into the state government omnibus policy bill. The bill was passed by the legislature but has not been finalized and presented to the Governor which is expected in the next couple of days. This bill creates a task force, including one MAPE member, to create a strategic plan to; (1) enhance the public involvement and input as the public uses state and local government services and public schools; (2) determine how technology can be leveraged to reduce costs and enhance quality; (3) determine how service innovation will conserve substantial financial resources; and (4) design a platform that will facilitate high-quality innovation and change in the future.
Another State Data Center Study
An amendment was inserted in the state government omnibus policy bill that requiring the state’s chief information officer, in consultation with the commissioner of management and budget, “to study the feasibility and estimated costs of entering into a lease or lease-purchase agreement with a private nonprofit organization, involving a private sector developer, to provide a centralized data center for state agencies, using state employees, or to upgrade current facilities for purposes of data center consolidation, using state employees.” The study will include a report of a potential schedule for consolidation of existing state agency data centers, and an estimate of any savings, increased efficiencies, or performance improvements that would be achieved through this consolidation. MAPE was successful at getting the original language to conduct the study amended to ensure it is staffed with state employees.
MAPE Budget Task Force Legislation
H.F. 2690, authored by Rep. Tony Sertich, required agency reductions in including proportionate reductions in expenditures on contracts, reduced unnecessary outstate travel, and prevented managerial staffing increases during deficit years was amended on the House floor to include the Governor’s unallotments. The bill contained unallotment cuts very similar to the final bill passed by the legislature. However, the vote was defeated on the House floor by a 27-105 vote.
Other Notables:
I. Certification and qualifications of rehabilitation counselors for the blind must include any necessary education background for rehabilitation counselors in Minnesota, a successful completion of a minimum of six weeks of intensive training under sleep shades from an adjustment-to-blindness center set forth by State Services for the
Blind in the contracting process, complete additional appropriate training as approved by the director of
State Services for the Blind, and complete continuing competency requirements as set forth by the director of State Services for the Blind.
II. 6,727,000 in 2011 was funded for additional identification and collection of tax liabilities from individuals and businesses that currently do not pay all taxes owed. $235,000 of this appropriation is for a training and mentoring initiative for staff. This funding is expected to result in new general fund revenues of $26,865,000 for the biennium ending June 30, 2011. This will be an increase in MAPE FTE’s at the Department of Revenue.
III. The DOC commissioner must find efficiencies to reduce adult facility per diems by one percent. The commissioner will be considering cooperating with the state of Wisconsin, increasing the bed capacity of the
challenge incarceration program, increasing the number of nonviolent drug offenders who are granted conditional release, increasing the use of compassionate release or less costly detention alternatives
for elderly, consolidating staff from correctional institutions in geographical proximity to each other to achieve efficiencies and cost savings, consolidating the department's human resources, technology, and employee development functions in a centralized location, and implementing cost-saving measures used by other states and the federal government.
IV. The commissioner of management and budget shall transfer $574,000 the first year and $1,170,000 the
second year from the Minnesota correctional industries revolving fund to the general fund. These are onetime transfers. These transfers will lead to cuts in FTE’s that will hopefully be done through attrition and early retirement incentives.
As the governor continues to sign bills over the next two weeks, I will be providing a comprehensive report on other pieces of legislation impacting MAPE members as an addendum to this report.
In Solidarity,
Richard Kolodziejski
MAPE Legislative Affairs Director
