What legislators said today about MnSCU's retirement payouts

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.

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.