No budget deal could result in the state's largest layoff

DNR office
Customer service specialist Kevin Habeck, left, assists Gene Skenandore of Woodbury with the purchase of a fishing license at the Department of Natural Resources license office in St. Paul, Minn. Friday, May 6. With no state budget agreement, Habeck may be facing a July 1 layoff date.
MPR Photo/Jeffrey Thompson

If Gov. Mark Dayton and the Legislature fail to agree on a state budget by June 30, it could lead to what would arguably be the largest single layoff in state history.

With no budget, the state would shut down, idling thousands, if not tens of thousands, of state workers deemed non-essential.

State government is the largest single employer in Minnesota. There are about 35,000 employees working for various state agencies under the executive branch. That doesn't include some 4,000 people working in state courts and higher education.

An exhaustive report produced by Minnesota Management and Budget sheds light on the state workforce.

Last year, the total compensation of executive branch employees -- including health and retirement benefits -- amounted to $2.4 billion. That provides a significant kick to the state economy.

But there's another way to look at that payroll, said Ed Lotterman, an economist at Augsburg College.

"People who are skeptical about government would say, 'Yes, but those same people, if they were working in the private sector, would be earning similar amounts of money and that would be adding to consumption and savings, also,' " Lotterman said. "And they would say the money wouldn't be coming out of taxpayers' pockets."

Three state agencies -- human services, transportation and corrections -- employ nearly half the state's workforce.

Nearly 90 percent of state workers are unionized, and the average pay for a full-time employee last year was about $52,000.

But most members of AFSCME Council 5, the largest state employee union, fall short of the average state pay, said Eliot Seide, the union's executive director. The union represents 18,000 workers, and they make an average of $38,000 a year, Seide said.

"Our members are living paycheck to paycheck, just like every other Minnesotan," he said.

AFSCME members tend to do blue collar and service work. They include workers who plow snow and patch potholes, and those who take care of the developmentally disabled, veterans and the elderly, Seide said.

Members of the other big union representing state workers, the Minnesota Association of Professional Employees, typically receive bigger paychecks.

Richard Kolodziejski, legislative director for the professional union, said it represents about 13,000 state workers, among them auditors, zoologists, hydrologists, botanists, psychologists and scores of other professionals. All of them have college degrees, and many have advanced degrees, he said.

"We represent people who actually inspect our lakes, OSHA inspectors," Kolodziejski said. "These are things that Minnesotans rely on today but may take for granted."

The greatest concentration of state workers is in Ramsey County, where 15,000 people labor for the state, mostly in St. Paul. There are more than 1,000 state workers in five other counties -- Anoka, Hennepin, Washington, Nicollet and St. Louis.

State employees have a very high rate of union membership. More than half of state employees are over 50. By 2020, half could be 55 or older.

State employees tend to be older because they stick with their jobs, said Seide. The typical state worker has been employed by the state of Minnesota for nearly 13 years.

"They don't come and go," Seide said. "Our members come to work for the state service and they stay."

Many state employees are at or near retirement age. Nearly 900 retired in the state's last fiscal year that ended June 30. But the average retirement age has been creeping up.

Last year, the average age for calling it quits was 61. A decade ago, it was 60.

Kolodziejski suspects many state employees are delaying retirement because the value of their investments dropped.

"People who are eligible for retirement have held on because of the market, and it's become less affordable for them to retire," he said.

Both big unions argue the state workforce is lean. From 2001 to 2010, the number of full-time equivalent state workers increased by only half a percent to about 33,000. That growth occurred when private sector employment fell by about 2.5 percent.

But in the past eight years, Seide said the state trimmed 1,600 workers who were in his union.

Minnesota state government hired fewer new employees in fiscal year 2010 than at any time in the past 10 years. New hires were down nearly 20 percent compared with the previous year. The state workforce may become even leaner, given recent hiring trends and a push by some Republicans to cut the state workforce by 15 percent over four years.

CATEGORYAMOUNT Total workforce appointment count 34,123 Total FTEs (fiscal year 2010) 32,786.10 Median age 50.5 Average age 46.17 Female*49.60% Ethnic minority*8.04% Persons with disability*4.68% Veteran* 12.11% Veteran with disability* 0.01% Average annual salary (full-time employees) $51,916.80 Represented by a bargaining unit 88.61% Permanent or unlimited status 90.63% Average length of service 12.92 years Full-time employees 84.86% Hires (fiscal year 2010)3793 Layoffs (fiscal year 2010) 247 Retirements (fiscal year 2010) 892 Total turnover percentage (fiscal year 2010) 6.43% Average age of retirement (fiscal year 2010) 61.3 Number of employees currently at age 61727 Number of employees currently at age 62 590 Number of employees expected to be age 62 in 2015 398