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Some warm, others give cold reception to wage freeze plan
by Laura McCallum, Minnesota Public Radio
March 7, 2003

Sen. Tom Neuville, R-Northfield, says his bill won't reduce the deficit. But he says it will help reduce the number of layoffs in the public sector, by preventing at least $800 million in salary increases in the next two years. (MPR Photo/Laura McCallum)

A proposal to freeze all public employee salaries for two years got its first legislative hearing on Friday. Sen. Tom Neuville says his bill won't reduce the state's projected $4.2 billion. But he says it will help control costs for the state, cities, counties and school districts. The idea has sparked a wave of opposition from unions, teachers, mayors and other groups.

St. Paul, Minn. — Sen. Tom Neuville joked that he's been wearing a bullet-proof vest ever since he introduced his bill. The Republican from Northfield says he's received hundreds of angry letters, e-mails and phone calls, calling him everything from a moron to an idiot. Neuville says he may not be popular, but he achieved his goal of getting the attention of cities, counties and school districts.

"The purpose of putting that bill in when we did is to send a shouting message to every local government, if I were you, I'd be very careful how you control your spending in the next four months. Wait to see what the state does to you! And we wouldn't enter into any new contracts right now if I were you," Neuville says.

Neuville's bill would prevent state agencies, MnSCU, the courts, cities, counties and school districts from approving any pay raises for the next two years. Groups representing state employees, cities, counties, cops and teachers packed a hearing room to speak out against the bill in the Senate State Government Budget Division.

Janet Alswager of Education Minnesota, the state's largest teachers union, says the state shouldn't interfere with the collective bargaining process. She says a two-year pay freeze will cause many teachers to leave the profession.

"If you do something like this, you may say that you're saving layoffs. You may say that, but I can guarantee you, you will lose more teachers because they will lose faith in this system," Alswager says.

The Minnesota School Boards Association takes a different view. Lobbyist Bob Meeks says his board supports the pay freeze idea as a short-term solution for school districts' budget woes. Meeks says schools will get less state money over the next two years under Gov. Tim Pawlenty's budget proposal. He says school boards will be forced to "canibalize" their young teachers or cut education programs if they don't get more money. He says a pay freeze could save $300 million in teacher salary increases, which translates into $300 a student.

"To those who say, don't balance the budget on the back of the teachers, I suggest to you, let's not balance the budget on the back of the students," Meeks says.

Meeks says he would support a sales or income tax increase to help balance the budget, but no lawmaker has proposed a tax increase.

The chair of the Senate Finance Committee, St. Paul DFLer Dick Cohen, says he doesn't think there will be a tax increase this session. Gov. Pawlenty and House Republican leaders have pledged to balance the budget without raising taxes. But Cohen and other Democrats are skeptical of the pay freeze idea.

Sen. Jane Ranum, DFL-Minneapolis, says it's a simplistic solution to a complex problem. "If you believe in local control -- and I thought Republicans believed in local control, and I know most Democrats believe in local control -- consistently, then you have to let the people at the local level have the flexibility to do what they need to do."

Ranum says the state's revenue forecast also predicts that a pay freeze would result in lower tax collections for the state. About 1,500 state employees are expected to lose their jobs under Gov. Pawlenty's budget proposal. Without a freeze, officials with the state Department of Employee Relations estimate that another 790 state workers would be laid off.

Sen. Neuville says what's happening in the public sector is no different from the layoffs and pay freezes and pay cuts that have already occurred in the private sector. The Senate committee took no action on Neuville's bill.

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