Dayton, lawmakers reach deal on commissioner pay hikes

The Minnesota House passed a bill Thursday that could finally settle the dispute legislative leaders have had with Gov. Mark Dayton over controversial pay increases for commissioners and department heads of state agencies.

Dayton reached an agreement with House Republicans and Senate Democrats ahead of a vote to delay the raises he approved last month. It trims state agency budgets for wages already paid out and returns authority for future pay hikes to the Legislature.

The House bill passed by a vote of 106 to 21. It now must be reconciled with an emergency funding measure the Senate passed last week that temporarily rolled back the raises to July 1. The House bill does the same.

Senate Majority Leader Tom Bakk, DFL-Cook, said a House-Senate conference committee must work out the final version of the bill, which he said will be ready for floor votes next Thursday.

After Dayton signed off in January on the pay increases, which totaled about $800,000 to 26 commissioners and agency chiefs, the raises quickly became a sore point with lawmakers.

Lingering disagreement over the pay raises held up action on an emergency spending bill for three state departments — Human Services, Natural Resources and Health — which need cash to make it through the 2015 fiscal year.

Human Services is dealing with costs related to the Minnesota Security Hospital, while the Health Department has added costs related to monitoring for the Ebola virus.

The dispute also held up funding for the Minnesota Zoo.

House Speaker Kurt Daudt, R-Crown, said negotiations with the governor and the Senate produced a way to move ahead on the funding bill, while also addressing concerns about the raises.

"Our caucus, the Republicans do not support the pay increases,"Daudt said. "We think that they were excessive. But we also don't feel like we need to be playing political chess with things like this. So, we want to make sure that we get that needed funding out."

Using authority that lawmakers granted in 2013, Dayton approved big salary increases for more than two-dozen top officials. Still, the move took many legislators by surprise. Under the new agreement, those salaries will be temporarily rolled back to previous levels until July 1. Some department budgets will be trimmed to cover the wages already paid, and future increases will require Legislative approval.

During debate on the House floor, state Rep. Matt Dean, R-Dellwood, said the public has been outraged by the raises.

"The average person across the state of Minnesota who's struggling to pay bills says this doesn't make sense," Dean said. "This is out of touch. This is out of touch with my daily life in Minnesota."

State Rep. Steve Drazkowski, R-Mazeppa, called the pay raises "crony government at its worst."

"All eyes will be on the governor on July 1st." he said. "The question will be: Will the governor again enact huge salary increases to his political appointees?"

State Rep. Clark Johnson, DFL-North Mankato, said he was more concerned about the broader funding bill, including its $10.4 million allocation for the Minnesota Security Hospital in St. Peter.

"There's been a lot of politics surrounding this bill, and those politics, I think, have raised a lot of eyebrows across the state of Minnesota," Johnson said. "But nowhere more than in St. Peter, Minnesota. And eyebrows are raised really because of the delay in getting this bill to the floor. So, this is a good day in St. Peter."

The Senate passed the emergency funding measure last week after adding a provision to temporarily roll back the raises. That vote angered Dayton, who lashed out publicly at Bakk. They haven't spoken since.

But Bakk said there will be plenty of opportunities for them to get together.

"I think it might have been nice if I had known the raises were going to happen, and I probably could have told him which of the options the Senate was going to consider," he said. "I probably could have told that to him. So, I think we'll probably be a little more careful about communicating with each other moving forward, and I think that's probably a good thing."