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Associated Press, Published August 30 2012

GOP-led panel rejects Minn. state worker contracts

ST. PAUL — Republicans on a legislative panel rejected new union contracts for more than 27,000 Minnesota state employees on Thursday, drawing chants of "shame on you" from dozens of state workers and raising a potent issue ahead of November's legislative elections.

The Subcommittee on Employee Relations voted 6-4 along party lines to disapprove the contracts for the two largest state worker unions.

The panel's action blocks the state from implementing the contracts unless next year's Legislature approves them. Republicans are fighting to keep control of the Legislature, with all 201 seats up for election in November.

Republicans said the contracts — which contain a 2 percent across-the-board raise and would continue the state's full coverage of health insurance premiums for employees, and 85 percent for dependents — would increase costs by $59 million, or $13 million more than anticipated in the current state budget. Instead, they want to see raises tied to job performance and employees shouldering a portion of their insurance premiums. They said the state has been generous with its employees and needs to operate more like a private business.

"Today's union leadership are dinosaurs living in the past," said Sen. Mike Parry, the Waseca Republican who heads the panel. "It's time for new union leadership that will realize what the economy is we are living in and deal with it."

The hearing drew a feisty crowd of state workers, who jeered and booed when the panel rejected the contracts.

"The part that I think was hardest on me today was listening to how worthless we all really are to the state," said JoAnn Holton, a Human Services Department employee who works in state-operated group homes. "And I always wondered: When did I become the problem of Minnesota as a state employee?"

Union leaders reacted sharply to the panel's recommendation that Democratic Gov. Mark Dayton reopen contract talks with AFSCME Council 5 and the Minnesota Association of Professional Employees, after the original negotiations lasted 18 months. The subcommittee has no power to force new talks.

"We do not negotiate with the Legislature," said Eliot Seide, AFSCME Council 5 president.

Democrats on the panel said state employees deserve what they characterized as a modest raise after many lost three weeks of pay during last year's politically prompted government shutdown. They said the state will lose the almost $8 million-a-year savings it would have gotten from employees paying higher health care co-payments and deductibles if the contracts were implemented.

"They're not asking for much," said Rep. Leon Lillie, DFL-North St. Paul. "This is ridiculous. This isn't the time or the place to negotiate these things."

The vote had been expected for weeks after a contentious hearing where Republicans outlined their objections.

The two-year contracts would run through June 2013. Their rejection temporarily leaves state workers operating under a contract that expired in June 2011.

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Copyright 2012 The Associated Press.