For Immediate Release Contact: Murray Cody (651) 287-8767
Tuesday, May 5, 2009
Minnesota Association of Professional Employees Finds over $350 Million
To Help Balance State’s Budget
Union Offered Spending Cuts over Two Weeks Ago to Governor’s Negotiations Team;
No Action Taken
Jim Monroe, Executive Director of the Minnesota Association of Professional Employees (MAPE), and Chet Jorgenson, President of MAPE, today offered more than $350 million in spending cuts and uncollected revenue to help balance the state’s budget. The savings are uncollected revenue rightly owed to the state, streamlining bloated management in some state agencies, decreasing outstate travel and trimming outside contracts where state employees could do the work.
“In these tough economic times, it is unfathomable that Governor Pawlenty and his administration would not work with our union to find innovative solutions to reduce state government spending,” said Jim Monroe. “The Governor issued a challenge to public employee unions on his radio show and when we answered the call, no action was taken. Did Governor Pawlenty really mean it or was it just rhetoric for his own political ambitions?”
Monroe was referring to the Governor’s April 10th radio show where Pawlenty commented that “the public employee unions, and the spenders and the DFL should quit coming up with the tax increase of the week or the day idea and focus on how we can reduce our spending.” MAPE took the Governor’s challenge seriously and outlined the following ways to reduce Minnesota’s historic deficit:
- The State of Minnesota fails to collect an average of $30 million a quarter. The agencies categorize this uncollected revenue as “accounts receivable write-offs” totaling close to $120 million. This means approximately $120 million in revenue remains annually uncollected, or $240 million for the biennium. In a time of budget crisis, shouldn’t government be more proactive to collect all accounts receivable?
- Streamline state agencies with bloated management. Minnesota’s non-profit guidelines say state funds will not be granted to organizations with a management-to-staff ratio over 15 percent. The potential cost savings if various top-heavy state agencies were streamlined to 15 percent are approximately $55 million annually, or $110 million for the biennium.
- Replace outside contractors with state workers to save money. For example, in 2008, 60 different electrical inspection contractors were paid $9.5 million by the Department of Labor & Industry. For the same work, 60 MAPE electrical inspectors would cost the state about $6.1 million, saving $3.4 million in a year, or $6.8 million for the biennium. Overall, the state paid $1.9 billion for outside contracts in 2008. Some of these are perfectly legitimate. However, some of the contracts are for services that state employees could do.
The savings from streamlining management, collecting accounts receivable write-offs and canceling outside contracts for electrical contractors adds up to approximately $356.8 million for the biennium. Additionally, there are two other areas where real savings could be found – preventing furloughs and curtailing out-of-state travel.
- The state spent over $13 million in 2008 on out-of-state travel. Isn’t it time to take a look at what out-of-state travel should be curtailed during a budget crisis? It is time to ask what is necessary.
- Avoid furloughs. Unlike private industry, when MAPE workers are furloughed, the state will lose approximately $4.3 million. The cost will come from forced reimbursement Minnesota will have to pay the federal government if MAPE workers are furloughed as 60 percent of MAPE jobs are federally funded. The additional cost will come in uncollected income taxes, and lost federal money that the state receives in revenue. The Social Security Administration and the U.S. Department of Labor have put states on notice that reimbursement will be requested if furloughs occur.
“As problem solvers, MAPE members take great pride in providing vital services that help the citizens of Minnesota. We are on the front lines when it comes to public safety, disaster evacuation and relief, protecting the food supply or identifying pandemics,” said Chet Jorgenson. “Therefore, it makes great sense as problem solvers to offer solutions to reduce Minnesota’s historic deficit. In these troubled times, we all need to work together to build a brighter future.”
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