Cuts To Health Care, Worker Pay Freeze Pass Senate

ST. PAUL, Minn. (AP) — Senate Republicans united Wednesday to approve deep cuts to health and welfare programs and a ban on state spending to support the federal health care overhaul, aiming to blunt the fastest-growing part of Minnesota’s budget.

The bill would reduce projected spending on health and social service programs by $1.6 billion over two years, a key part of the GOP plan to plug a $5 billion shortfall. It cleared the Senate on a party-line 37-26 vote. The proposal seeks to slice into spending on items as large as the Medicaid health care program and as small as subsidized coverage for eyeglasses and mental health grants for children.

The vote came hours after the Senate passed a cost-cutting bill that freezes government worker pay, alters state employee health insurance and slashes budgets for most agencies. The two bills join several other budget measures moving through the Legislature this week. Majority Republicans insist they won’t raise state taxes, as Democratic Gov. Mark Dayton recommended.

“We are not alone in trying to change health care in this country,” said Sen. Michelle Benson, R-Ham Lake. “Minnesota does a good job and all the good things we’re trying to do are being crowded out by federal mandates.”

One of the health bill’s most debated provisions would require the state to seek federal permission to overhaul parts of health coverage bound by federal requirements, substituting current health plans with subsidies to buy private insurance. Democrats flatly predicted there would be no federal waiver and questioned $600 million in savings the bill counts on from that provision.

“You can’t simply budget a hope,” said Sen. Dick Cohen, DFL-St. Paul.

Human Services Commissioner Lucinda Jesson warned legislators against banking on the federal permission, while predicting the subsidy approach would throw 86,000 people, including families with children, out of insurance because of cost-sharing and other difficulties.

“We may disagree on the wisdom of certain policies, but we jeopardize the fiscal stability of our state if we ignore the realities of federal funding,” Jesson said in a letter to Hann.

Another measure in the bill would roll back a Medicaid expansion Dayton ordered early this year in his first act as governor. Dayton threatened in January to veto any legislation standing in the way of that move, which extended more generous health coverage to 100,000 vulnerable adults.

Jesson said those patients could conceivably become uninsured, too, because the bill doesn’t offer hospitals enough money to participate in a revived version of the state-paid General Assistance Medical Care program.

The Senate health bill differs significantly from a House companion expected to get a vote in the coming days. Both bills are due to land in a conference committee.

Meanwhile, the Senate’s state government finance bill — approved 36-29 — is notable for the size of its cuts: Minnesota would spend nearly 60 percent less than anticipated on state agencies and employees than before. And it comes in about $500 million leaner than Dayton proposed last month.

The bill depends on several steps to cut the cost of doing government business and on the state’s ability to gain revenue by rooting out tax cheats. Democrats argued that Republicans were being too rosy in their savings projections, with one saying the GOP would be better off trying “to find the pot of gold at the end of the rainbow.”

Republican Sen. Mike Parry of Waseca chafed at comments the bill relies on phony savings and said Minnesota can’t get by without wholesale changes in government operations.

“What are we afraid of in looking?” Parry said. “Isn’t that what we owe our citizens? Aren’t we supposed to look at new ways of doing things?”

Among the changes the bill would bring:

— The executive branch would be forced to trim the employee ranks by 15 percent by 2015, either through early retirements, layoffs or broad restructuring.

— State workers wouldn’t see any pay raises for another two years after having largely flat salaries for the last two.

— State employee health programs would be audited to weed out ineligible dependents, and every worker would move to high-deductible insurance plans with costs partially offset by state contributions to health savings accounts. Preventative care would be fully covered by the state.

— Special boards that assist ethnic minorities would be consolidated, with the exception of an American Indian agency.

— Most state agencies would see 10 to 15 percent cuts to their operating budgets. Military and veterans affairs agencies are spared from those cuts.

Dayton’s agencies warned that they would reduce services and close offices, resulting in tax refund checks being issued slower.

Senate Democrats predicted agencies won’t be able to meet their budget targets without massive layoffs.

“It goes way too far. In fact it’s a job killer,” said Sen. Chuck Wiger of North St. Paul. “A job is a job if it’s in public (sectors) as well. They pay taxes. They contribute in the community. They pay mortgages. They buy groceries.”

(© Copyright 2011 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)

More from Pat Kessler
  • Tiredofthehypocrisy

    Let’s keep in mind that a pray freeze on the largest class of employees in this state is going to directly effect big business. State employees will not be in a position to purchase the goods and services in this already recession weakened business climate. The very Legislators who are voting for this bill are actually sealing their own coffins. More business’s will fail because this largest employee base will not be purchasing from them. Again, this is evidence how stupid the Republican party members are in this state!!

    • RR

      Pay freeze for gov’t employees. Hey, welcome to our world in the private sector…

      • Tiredofthehypocrisy

        yes, but when times are good you enjoy those bonus checks!! I think there should be a cross the board pay freeze from the top of the organizational chart in both public and private to the bottom for the next two yars. I alos think that there should be a freeze on bonuses for the next two years. Let the pain be spread around.

        • Southern MN Mom


          How does that work in a free enterprise system to have pay freezes across the board and freezes on earned bonuses? Sounds illegal or like socialism to me-

          • Walker

            It would be socialism. Tired is expressing an opinion that is valid in light of situations like the bank bailouts and the executives still getting huge bonuses. It would not be socialism if they required companies that did business with the government to have that kind of policy because it is our money going to them.

          • How About Them Apples

            You’ve got that right, the Tea Party is highjacking America and turning it into The Socialist States of America.

          • Katie

            Back when Nixon was president in the early 70’s, he recommended no pay raises for anyone, public or private. I was working to put my husband through college at the time and my employer went along with the recommendation. So even though it wasn’t law, it was implemented by many employers.

          • Tiredofthehypocrisy

            Welcome to the world of being a public employee.. Take away the perks and morale goes down. Freeze wages and the talented younger staff leave. Public services do nto get delivered. No more camping trips to the state parks. No more trips to Itasca to have kids cross the tiny Mississippi river for a photo op. Public employees are workers just like private sector workers. They provide a valuable service. they work hard for their money just like you do. Let’s not break the backs of State public employees who have lost cost of living increases because of the State budget.

      • digdug30

        Why does everyone assume that all state employees are a bunch of overpaid slackjobs? Many engineers, scientists, and health care practioneers who work for the state get paid less than their counterparts in the private sector. How is the state going to keep or recruit skilled individuals for these positions when the pay is low and the benefits are terrible? In the future, is the state going to outsource all work that could have been done in house to consulting firms because they no longer have a work force that is qualfied to do those tasks? And how would this save any money? It would only shift the money from state employees to private firms contracted to do the work.

        • Benny

          Bids can be put out to private firms, we would not be paying retirement benefits to private firms, we would not be paying down time (no work) to private firms, we would not be paying for healthcare to private firms. We would not have to house private firms, etc, etc. etc.

          • joe

            Of course the government would be paying for those costs. A business has to meet their overhead (benefits, salaries, etc.) plus make a profit. They’re going to roll those costs into the contract so that they can pay for their employee benefits.

            • Benny

              You just don’t get it. They can take a job for less to keep the workers working, they can fire bad workers, they can hold pay increases in bad years, they can cut back on workers during slow times, etc. NO government agency has even been close to profitability. Just look at the difference between the post office and fed x or UPS. You can see the attitude of the workers, the service, etc.

              • Eva

                what do you have against the Post Office

              • joe

                You’re comparing apples to oranges; I just don’t see your logic. The government is never going to completely operate like a private business because it’s not based on generating profits. I’m not advocating government waste by any means, but if the principle of your argument is that government should operate like a private business how do you propose going about that? How do you create profit margins for an entity that will never turn a profit? By the way, there are unclassified state employees who have no union representation and haven’t seen pay increases for years.

                • Tiredofthe hypocrisy

                  The difference between the private sector and Public sector is that the public sector has mandates. For example, our public school teachers are mandated to teach all children regardless of disability, race or religion. The private system can put restrictions on who they will serve. Consequently, it is the public service employee who are the best trained and best prepared to work in the toughest situations. Remember the public service emergency responders heading into the World trade tower on 9/11?

              • Tiredofthehypocrisy

                They can fire workers once they reach a certain age. Where is the ethics? A medical coroner friend of mind told me that she is seeing a record number of suicides unlike any she has seen previously. I believe it is because when a worker is unable to find a job they lose their sense of hope. Public employers recognize the importance of longevity. Private employers do not. My younger counterparts are not able to do half the things I can do with my experience. Because of my experience I can analyze a problem in 1/2 the time and come up with the solution: the end result is I have a happy customer.

          • Do Theis

            So, let me see. You argue that private contractors would be the way to go for tax payers.
            After the government no longer has the ability to perform those functions, what do you suppose the private contractors will do? They will cost us more because now they are in the position to F k the tax payers by submitting higher bids for a job that used to cost less. You are being very short sighted.
            No private contractors give anything away.

            • MAD MOM

              From experience it would actually be cheaper because the state imposes prevailing wages from all contractors ,smaller firms can then compete which otherwise couldn’t bid on state contracts because they couldn’t afford to pay the higher wages. Prevailing wages never made sence to me. It seemed such a waste of government (tax money).

              • Wilbur

                What experience do you have because you argument makes little sense to me.First is if the smaller contractors did not have to pay prevailing wage then why wouldn’t the big contractors? Two, would not the head of a corporation be making more than the department heads at the state?. Three all of the statistics state that the state workers earn less than their private counterparts. Lastly, see the records for the privatized prisons. It did not work.

                • rsc

                  Private firms. Great idea. You have a contractor sitting in one cube making $175 an hour while the state employee sitting next to him is making less than $40 an hour to do the same job. This is happening today because of the hiring freeze. Can’t hire the people you need but the work still needs to get done –hire contractors at double and triple the rate of employees. Oh, that’s right, the private sector is getting the money, not the public employees. I’ve just gotta start thinking like a Republican…

        • none

          Well said. This is all propaganda of the big businesses and GOP. When it works in their favor they are screaming about socialism/huge government/deficit. But when it time to move Company stock higher to get bonuses they lay off people, trying to put them against each other by lying that government employee are the rich lazy people, shifting more and more of health care cost to the employee and lying again that this is because of Obama, sending job abroad and killing whole industries by explaining that this is ‘good for business’ and in the same time asking for government money for anything starting from airports to stadium and later still leaving the state if the deal is better. American people need to stop to blindly believe in what they are told and use just simple common sense to make decisions.

      • Mr G

        I don’t know anybody in the private sector that doesn’t receive a pay raise every year. I know I made 4.5%. If I was asked to take a pay freeze, I’d be looking for another job. If you are trying to stimulate the economy – taking people’s money away is not the way to do it.

        • Todd

          Where do you work? Most of the people I know have had thier wages froze for at least 2 years, in the public sector. I know a program designer with a masters degree that that took a wage cut and he said he is lucky to have a job. You must work for one of those banks that got all the taxpayers money.

          • Todd

            I meant private sector, long day.

            • Mr G

              No, not a bank. And probably not a good example considering all the comments. You’re right – maybe I’m lucky,

              My point – is that if state was a business that was in trouble…the executives certainly would not be looking at the shortfall thinking we need to cut cut cut. They would be looking at ways to increase revenues. Second, decreasing salaries of the middle class will only hurt the economy – the majority of the people (middle class) will be afraid to spend.

              If you want to eliminate debt – you need to increase revenue’s. Dayton is right in looking at a temporary tax for the wealthiest, where it would have the least impact on the state and the economy.

              • Tiredofthehypocrisy

                Temporary tax would be a good thing, but then include a tickler whererby the tax is taken off once the economy starts generating a positive cash floor and the deficits are eliminated. Same thing for a temporary freeze. Allow the system to automatically take it off once the economy is going forward at full steam. then reward those public employees with the cost of living increase so they will be able to put it back into the economy in the form of spending.

        • Stacie

          4.5%? Count your blessings. If I get 1.5% I’m lucky. I was laid off and took a job with the same company for $19,000 less/yr because I needed a job with benefits and it’s all I could find.

          • Eva

            This is the private sector everybody here is embracing…they actually want to cut the minimum wage….and do away with other benefits….please don’t get me started on the socalled benefits of the private sector. The bottom line is still that businesses first and foremost are looking at their own bottom line, and if they can get away with not having to pay a living wage or taking our jobs overseas they will do it in a heartbeat without any remorse of the hardship they have caused the average working Joe

            • Tiredofthehypocrisy

              The war against the public employees is the final frontier of eliminating the liveable wage. The private sector upper management would love nothing better than to have a Walmart economy where it’s workers are receiving welfare to supplement their wages because the private employers are too cheap to recognize the value of it’s work force.

      • Dee

        I second that and welcome to the real world.

    • doc

      Send me some money for my capaign so I can run for President!!

    • Eva

      Bravo, the good thing is that we have a democratic governor. I say increase taxes already and be done with it…..I don’t mind paying more if it means we can dig our selves out of the Pawlenty hole

      • Tiredofthehypocrisy

        One magazine quoted that Pawlenty was responsible for putting Minnesota on solid financial footing….

  • TomTom

    I would like to see House and Senate menbers receive the same per diem when in travel status as the employees who’s pay they are affecting. $86 per day vs $31 perday. Why does it cost a politician so much to eat, and whay can they draw it every day of the session?

    • Katie

      It costs them more to eat because they’re also feeding that lobbyist or corporate exec that they’re meeting for lunch. The reason they can draw it every day is that they voted that for themselves. “Elected officials” are the only people in the country that decide themselves what pay they will receive and what benefits they will get, too. If they were treated like employees instead of “elected officials”, they wouldn’t have that power. We should have a non-partisan committee who sets their wage and benefits every 5 years or so. It’s ridiculous that they can set their own pay and benefits.

      • Tiredofthehypocrisy

        I agree. It is time that we draw the line in the sand and force these hypocritical politcians to live within the same rules of the rest of us. Did you know that our congressional men and woman earn the same salary forever if they serve just one term and that there kids are exempted from repaying student loans? How is this fair? Our state legislators are wasting so much time on purpose just to get this thing into a special session so they will continue collecting their per diem and other perks

  • Lonnie

    Sounds good on the surface, makes good political talking points, and good news headlines. But, reality is state emloyees are not “getting rich” working for the state. Also if you look at their wages over the last 30 years, they have not even kept up with inflation. Is getting a wage that you can actually live on is “getting rich”?

    Why doesn’t the legislature pass laws to do something about doctors wages, dentist wages, CEO wages, hourly rates for car repairs, freeze grocery prices ???

    Had my furnace fixed last week, their hourly rate is $120.00 an hour !!! What is the going hourly rate in dealer service departments now??? What does average dentist make in the metro right now? Took my son to the dentist this afternoon for 3 fillings, a hour later and it was a $179.00 per filling !!! Not a bad wage indeed, but we don’t hear boo about doing something about that class of wages or income do we???

    Certainly states like individuals have to live within their budgets, but what seems to be currently going on is those on top do not want to sacrifice even a nickle. Those on top call for no tax increases on the wealthiest, tax breaks for corporations and business, yet they want to cut programs for the poor and disabled???

    In my opinion it really boils down to class warfare in my opinion. Seems those who already have a lot want even more from those who have something( the middle class) and those who have nothing(the poor).

    • Todd

      You hear lots about it, they are called tax cuts for the rich. The docs get paid off by the insurance companies to not provide the services you need. These are the same insurance companies raising your policies, cutting benefits and raking in record profits. But don’t reform healthcare. The furnace guy is average (he only gets $29 of that $120 by the way), but a lot of those guys are unemployed right now. CEO’s provide too many campaign contributions to be hurt by any politician. Car repairs? Do it yourself, at least what you can do. Grocery prices are actually pretty stable due to farm subsidies.

      You hit the nail on the head, class warfare. They don’t want a middle class anymore, just rich and poor. The book 1984 was about 27 years off.

    • MAD MOM

      Healthcare cost are expected to rise infact they rose 4x’s the amount of wages. What causes healthcare cost to rise, it is the stupid stuff no one really pays attention to such as, obesity and general stuff that we can simply put a stop to

      • Earl

        Mad mom. Obesity and general stuff drive up the usage of health care making insurance more expensive. What drives up the cost of health care is threefold. Liability drives up the cost. Make a mistake, there is a lawsuit. Doesn’t matter if it is frivolous or not, there is no cap on settlements so therefore the liability insurance is expensive. To avoid any possible oversight more tests than necessary are done. The second is technology and the profit from it. New drugs cost more than generics. A biventricular pacemaker with an ICD costs more than a single chamber. Granted the former in each case works better than the latter, but it still drives the cost. Lastly (Folks out there don’t crucify me for this) even when there is no hope, people expect miracles and want more done. That is at the thousands a dollar a day hospital. I am only telling you the why, not what should be done other than to encourage the population to eat better, exercise more, have a close to normal BMI (measure of obesity for those that did not know) and cut down on the harmful vices.

      • Eva

        Wrong, obesity and general stuff we can control will have somewhat of an impact, the biggest rise in cost is the fact that the Insurance industry is not being regulated enough. I say single payer insurance for all…..and control how the health insurance industry raises rates just because they can.
        I grew up in Germany, under our healthcare system…..boy do I miss it.

    • Worker bee

      Lonnie, you get it! Since the Reagan years there has been a dramatic shift of the tax burden to the middle and lower classes to benefit the wealthiest 1% of people in this country. Mark Dayton also gets it! The deficits really got bad under Reagan. Clinton ran a surplus and the stock market was happy. Historically the stock market always does better under Democratic administrations and higher taxes have actually led to prosperity. The tax base needs to be broader–more people need to pay in–not narrower as the Republicans want. Especially with stagnant wages for most Americans (public and private), the wealthy need to pitch in and like it. Are they not LOYAL Americans? Don’t they WANT to pay their fair share? If the wealthy and corporations don’t pay their fair share of taxes, the rest of us Americans will have to. I’m tired of subsidiizing rich people and big corporations.

  • Bob

    Does this also affect our elected officials who are backing this plan? Is my elected official going to take a pay freeze, pay more out of his/her own pocket for insurance and for his/her family’s coverage? I doubt it. Electted officials always say “we need to cut back on public workers, etc.,” but then they fail to cut their own benefits. Aren’t they public works?

  • AshamedOfTheLegislators

    The legislators provide these cuts and never do the real work to figure out what jobs will not done. 15% by 2015 is more of a slogan than a real review of state jobs. The high deductible health plan is nuts. The state should be a responsible employer and provide adequate wages and benefits. The lower income state employees can’t absorb a $5000 deductible. It’s already criminal that some private businesses do not provide adequate wages and benefits. What happens is that these private employees come to the state when they need help with health care or possibly general welfare. It’s us taxpayers that pay for it – while the business, the upper management & stockholders make the profits.

  • Donald Theis

    Legislative Pay!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! Another rip off of tax payer money.

    I don’t hear or read anything about Minnesota legislatures taking a pay cut. For the 90 day session , these people get almost $32, 000 and then the get almost $100 per diem. That is a total of nearly $400 a day for 90 days.

    They are more than willing to cut everyone else’s pay, why don’t they show us what it means to sacrifice.

  • Dennis P

    Is it a prerequisite to be a democrat to work in the government?

    • Fred

      No, I know quite a few people who work for the government who are not Democrats. I knew a lot of people at the University of Minnesota who were Republicans. I know a lot of health care workers are staunch Republicans. On the other hand, if you currently worked for the government or had a company that did contract work for the government, would you vote for this group of Republicans considering where your paycheck comes from?

  • Ron

    To Tired and Mr G. I work in the private sector. As for 4.5% pay raises try $0.25 / hour raises per year. Then when the auto industry slowed down in 2008 wages were frozen and over time went away and we were working 32 hours a week. Equals 33% pay cut.
    Have new job now. With High Deductable Health Savings acount. Why should you have it better than the rest of us just because you work for the goverment?

    • Mikw

      Why should we “dumb down” to your level Ron, let’s shoot for the bottom were we receive no benefits and work for minimum wage! Great plan Ron….?

    • Mr G

      Ron, I work in the private sector too. But in a different line of work than you. What I’m saying – is these “cuts” are going to hurt the economy. You need to make more revenue – not “cut” everyone down to nothing. I’m sorry about the car industry – I buy cars that support american auto industry. I’m sorry you have a high deductible health savings – let’s hope that the new health care laws will help you. Republicans aren’t looking out for you, Ron. Only the wealthy and the unrealistic profits they are gaining off of people like you and me.

  • Lonnie

    It is truely amazing to watch the masterful manipulation going on in the political arena. The pitting of the private sector against the public sector. Gets the private sector to focus on a supposed “boogey man” instead of the real culprits of our current finacial situation.

    Maybe private sector employees ought to start demanding more pay and better benifits rather than trying to drag public employees down to their level of misery.

    Private sector employees have to wake up and relize they might be worth more than they are currently recieving, and quite being the sheeple of the rich and corporations.

  • That Guy

    Robble, Robble, Robble!

  • Paul

    People who are voted into office are considered Public Employees too.

  • Sick of Tea

    And the Republican assault on democracy continues. Once they get finished, will all of have to bow and call them “Your Highness”?

    • Marian

      The Tea Party is all about Democracy and the assault is from the left not the right. Limited government to allow us more freedom and less intervention into our way of lives. The socialist agenda of the left has never been more evident.

      • Mr G

        I’m amazed at how many government programs tea partiers use…Medicare, Social Security, public schools, city workers, sewer, etc. You want less governement – but enjoy the benefits that our governement is giving you.

        • Tiredofthe hypocrisyg

          I second that.

  • Worker bee

    The Tea Party is about nothing but power. The assault on America is from the right. If you don’t like “leftist” policies, Marian, don’t file for your social security, medicare, worker’s compensation, etc. You can leave those benefits for us lefties. I assure you we will appreciate the extra money. Lonnie is right; the politicians, corporations and the wealthy all have Americans fighting against each other. When we are all down to third-world wages, will that make them happy?

  • Jon

    The good thing about Minnesota right now is we don;t have to take new laws up the butt like Wisconsin does with their Republican governor. I don’t know why the Senate tries to pass such an obviously partisan budget through when Dayton will just cut it down.

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