State, unions reach contract deals

07/29/2005

Dane Smith, Star Tribune
July 29, 2005

A tentative agreement on a two-year contract for some 30,000 state employees was reached at about 4:30 Friday morning between the state’s two largest labor unions and negotiators for Gov. Tim Pawlenty’s administration.

Union and state officials declined to reveal details of the settlement, but the recorded voice on the contract hotline for the Minnesota Association of Professional Employees says that the final offer included a 2 percent across-the-board pay increase in each of the next two years and no significant cuts or increased employee costs in the health-care plan.

The agreement, which will be voted on by union members in late August, covers 11,600 employees in MAPE and about 19,000 in Council 5 of the American Federation of State, County and Municipal Employees (AFSCME).

“The governor is very pleased,” said Cal Ludeman, commissioner of the Department of Employee Relations and Pawlenty’s lead neogtiator. “It’s a very fair agreement, one of the earliest in a long time, and it reflects budget restraint.”

Union officials sounded almost jubilant. “We’re very happy,” said Jennifer Lovaasen, communications director for AFSCME. “Our members got what we promised we would get from negotiations.”

Jim Monroe, executive director for MAPE, said that preservation of health-care benefits without increased employee costs was a major victory. “You won’t find a contract in the country that has not had pass-throughs or benefit cuts,” Monroe said.

The agreement was reached far earlier than in each of the last two contract talks. In 2001, both unions went on strike for two weeks and in 2003, when the state was in deep budget trouble, a settlement was not reached until September.

Monroe theorized that this summer’s unprecedented legislative gridlock, which led to a partial shutdown of state government for one week and unpaid furloughs for some 10,000 employees, actually might have given both sides greater incentive to settle.

“I don’t think the governor or the administration viewed another flap and more disruption of state government as a positive,” Monroe said.

Ludeman agreed. “We all recognize that it’s been a tumultuous couple of months for our employees because of the shutdown. It was a major impetus. We simply agreed on a schedule, set up a ‘push week,’ and stayed there until we got it done.”

Another key advantage, Ludeman said, has been the surprisingly strong performance of the state’s health insurance program under recent reforms. He described it as a “sophisticated, tiered plan,” that pushes employees towards “higher-quality, low-cost clinics.”

While the costs in other health-care plans in the private and public sector are leaping by double-digit percentages , the state plans are projected to show zero growth in costs from 2005 to 2006, Ludeman said.

Still unsettled is whether, and how much, furloughed employees will be compensated for their unpaid time off in the first week of July. Ludeman said that issue will be addressed through a “facilitated resolution process, down the road.”