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Contract talks with state, unions break down
The two largest state employees unions are recommending that their members reject a new contract proposal that state officials say is their best offer. Talks broke off early Thursday morning when the state and union negotiators failed to find agreement on how to structure health benefits. Union leaders say the plan will drive up out-of-pocket health care expenses. State officials say the increases will be modest given rising costs and the state's budget pinch.

St. Paul, Minn. — Union officials say they had no illusions going into this year's contract negotiations. Last spring, in response to a $4.2 billion projected deficit, lawmakers budgeted no money for wage or benefit increases. Now labor negotiators say state is actually moving backwards by shifting rising health care costs onto state workers.

"Employees are saying if they're going to freeze my wages, they damn well better pick up my insurance premium increases," said Peter Benner, the executive director of the state's largest public employees union, AFSCME Council 6. "You know, if you're going to hit in me one place, you know, I'm not going to like it, but you don't hit me in both places. And the state's saying we're going to take you in both places. So, and our team saying that is wrong and the state is being really short-sighted in how it's dealing with its workforce if that's what it's saying."

Benner says the state's offer provides for no across-the-board wage increases yet raises health care premiums. He says it also boosts numerous out-of-pocket health expenses that, in some cases, could run to $5,000 a year for some families. AFSCME's roughly 19,000 members include highway workers, clerical staff, and support personnel.

State officials say they recognize the increased costs. But they say the tight budget and steep health care inflation require greater contributions from employees.

Employee Relations Commissioner Cal Ludeman says he's already offered tens of millions of dollars more than was contemplated in state budget negotations. To meet union demands, he says, would overburden the state's payroll, resulting in signficant layoffs.

"And so we are going to have to accept the responsibility for potentially hundreds of layoffs of state employees with our offer. But I must say that what they would want would have to cause us to lay off potentially thousands of state employees," he said.

"That's nothing more than intimidation," said Jim Monroe, who represents the Minnesota Association of Professional Employees, which includes some 11,000 mid-level managers and technical staff. "It's not negotiations. They can manage. We are not that far apart on a dollar basis. It's an infinitesimal amount and can be managed by not filling vacant positions. It does not require layoffs."

By union calculations, the two sides are only $40 to $50 million apart out of a total payroll budget of more than $5 billion. If workers reject the contracts, state and union officials would return to the bargaining table. But Ludeman says he's not prepared to let talks drag on indefinitely.

Workers are currently working under their last contract, which technically expired in July. Ludeman says the state can't afford to extend that agreement indefinitely.

"We made the choice to extend the current contracts for the time being. That doesn't mean they stay in effect until a new contract is in place. The current contract can end by actions of either side," he said.

The state has never unilaterally voided a contract, and union officials say the tough talk from state officials is simply meant to intimidate.

Wayne Simoneau, a former state labor negotiator and DFL lawmaker, says it's difficult for outsiders to separate the posturing from true negotiations. But he says it's unlikely the state will see a repeat of 2001 when both unions walked the picket lines for two weeks.

"There is no virtue in laying off or having public employees out on strike. There's nothing to be gained on that. So I think people that are looking at what impact does this have on each individual member and the community at large, they're going to find some resolution to it," he said.

The union voting process takes several weeks. Simoneau says negotiations are likely to begin again in earnest at that time.

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