What legislators said today about MnSCU's retirement payouts

How'd it get this way?

There apparently aren’t too many things that Minnesota State Colleges and Universities (MnSCU) system CFO Laura King and faculty union rep Russ Stanton agree on.

But this afternoon it was this: That MnSCU really isn’t being extravagant in the amount of money paid out in unused sick pay and vacation to retiring MnSCU employees — despite what the numbers show and what politicians have been hearing.

Parry

Both testified before a legislative subcommittee on employee relations that is looking into why, among other things, some employees pulled in more than $100,000 in such payments. The information first came to light in a Pioneer Press story in November.

After that, Senator Mike Parry (R-Waseca) wrote a Dec. 15 letter to MnSCU Chancellor Steven Rosenstone saying:

“In 2010, Minnesota voters sent a message that unchecked spending is no longer acceptable. The new members of the (subcommittee) will be closely scrutinizing agreements for appropriate compensation levels. … If reforms and improvements are not made in the interest of protecting the taxpayers, such as vacation or sick time caps or payout limits, we retain authority to modify the contract.”

King and Stanton had, on the whole, no beefs with the numbers presented. But King said separation pay over the past six years amounted to 1 percent of payroll, and unused sick leave and vacation amounted to less than 0.5%. And she said that payments for unused sick time and vacation are common in other parts of the state government.

But King and Stanton’s main message was: You can’t just look at that one component of a person’s pay package. Some receive higher pay in some areas and less in others. You have to look at overall compensation package as a whole. And on the whole, MnSCU pay packages are at or below the national and state averages.

King told the committee:

“We need the flexibility to offer additional compensation components – so that we can augment our relatively lower salaries and remain competitive in the market for higher education talent.”

Although Stanton said such payouts are popular for those facing high after-retirement health insurance costs, King told the subcommittee she was open to restructuring contracts if she could use “other tools” to keep compensation competitive.

Some legislators also inferred from her testimony that contract elements they didn’t like were required by statute.

Rep. Keith Downey (R-Edina) told King:

“It sounds like we’re part of the problem here. If we’ve tied your hands, maybe it’s time we look at it.”

Rep. Ryan Winkler (DFL-Golden Valley) told his colleagues it was “a bad idea for the legislature to come in and tell MnSCU how to manage its employees. And after the hearing, Parry told me he was hesitant about getting bogged down in contract details.

“I don’t know if we want to get into the weeds. But we needed to hear how it is that we got here.”

No reports or hearings are scheduled on the matter, but Parry said the subcommittee members will gather more informaton and discuss the matter further.

 

 

 

  • It’s sad when legislators freely admit that they have no idea what has been going on in the employment contracts for state employees over the past 15/20/30/40 years (pick one). In Duluth they tried to take away retirement benefits from police and other public officials because it was later deemed to be too expensive to pay out. That’s a great gig – work 30 years under a certain set of rules only to have the rug pulled out from under you at the end. Sounds a lot like what the airlines did to many pilots and other employees: “Gee you thought you had a pension to rely on, but you don’t – our bad!!”

    Seems like nobody wants to live up to their obligations anymore. But I’m betting that no one is messing around with the compensation of the legislators. If they want to change the compensation package, then do that for new, incoming employees only – and keep an eye on the caliber of employees attracted to these jobs if the state chooses to become unfriendly to public employees. Of course there will be naysayers out there who think that college employees are a bunch of pampered, lazy academics who are drinking excessively at the public trough. “They can work somewhere else if they don’t like it here!” seems to be the growing mantra. Yep, that’s a great way to handle the education of our citizens. Reap what you sow.