Bill to cut Minn. state payroll 15 pct moves ahead

Republicans took over the Minnesota Legislature promising to create jobs. On Wednesday, they pushed forward a bill that would slim state government by cutting roughly 5,000 state employee positions.

The proposal from Rep. Keith Downey, R-Edina, easily cleared the House Government Operations and Elections Committee on a voice vote. It would require Democratic Gov. Mark Dayton to reduce both the ranks of state workers and payroll costs 15 percent by 2015, through layoffs, early retirements, furloughs, wage and hiring freezes and pension restructuring.

It's among the starkest symbols of the new leadership at the Legislature. In past years, public employee unions have been largely shielded by majorities from the state's Democratic-Farmer-Labor Party.

Downey, a management consultant who has worked with companies to reduce their costs, said Minnesota's work force is "unsustainable" and needs to shrink as soon as aging employees can be enticed to retire - or even faster. He said his proposal could save tens of millions in the upcoming budget period, when the state budget is running $6.2 billion short.

"If we don't come to grips with this, all we're doing is sending this downstream again," Downey said.

The proposal drew a harsh reaction from Democrats and public employee unions, who warned that fresh job losses could harm a tentative economic recovery.

"Be careful what you ask for - you could make the recession worse," said Eliot Seide, who represents almost 18,000 state workers as head of the American Federation of State, County and Municipal Employees Council 5.

Minnesota has more than 34,000 state employees, not counting those who work at public universities or colleges, the courts or the legislative branch. Downey said his proposal would eliminate about 4,500 jobs, while Seide put the number at more than 5,200.

Democrats' attempts to stall the bill failed. So did a move to protect classes of state workers such as snowplow drivers, prison guards and tax auditors.

"We could pink-slip every single state employee - every single one of them. You would have crickets chirping at the DNR, the Department of Agriculture, the Department of Revenue, and that alone wouldn't solve our problem," said Rep. Steve Simon, DFL-St. Louis Park.

Downey predicted savings of $150 million to $200 million a year once the cuts are fully implemented - with a major asterisk. His bill would funnel some of the savings to cover pension costs for early retirees, which could eat up an undetermined amount of the bottom-line benefit.

It would be up to Dayton to decide whether to offer early retirements, and how many, making it difficult to calculate the overall savings. The head of the Minnesota State Retirement System, Dave Bergstrom, warned the panel that much of the short-term savings could end up going back to pension costs.

Downey said the work force reduction bill would fit with other GOP proposals to eliminate obsolete government functions, consolidate administrative and technological work in state agencies and hold down government costs.

(Copyright 2011 by The Associated Press. All Rights Reserved.)