No sign of thaw for salary freezes

Last year, the University cut most paychecks by 1.15 percent.

Conor Shine

After three years working for the University of MinnesotaâÄôs Department of Mechanical Engineering, Larissa GonringâÄôs salary hasnâÄôt changed much.

An executive account specialist, Gonring is one of thousands of University employees whose salary has stagnated over the past few years due to various salary freezes and furloughs imposed as attempts to close the UniversityâÄôs budget gap.

During last yearâÄôs effort to balance the UniversityâÄôs budget, administrators levied a 1.15 percent pay cut on many employeesâÄô salaries. To soften the cuts, faculty and professional and administrative employees received an average 2 percent pay increase this month âÄî a scheduled raise that was delayed six months.

In line with already-signed contracts with bargaining units, civil service employees received a similar increase last July only to take a mandated three-day furlough over winter break, equivalent to the 1.15 percent cut.

With the state facing a $6.2 billion budget deficit and with cuts to University funding looming, another year with no compensation increases for University employees is becoming more likely.

“WeâÄôre certainly considering [a freeze] for next year,” said Chief Financial Officer Richard Pfutzenreuter. “Salary freezes are always an option in tight times because wages are our single largest cost.”

Salaries and benefits currently make up nearly 45 percent of the UniversityâÄôs total annual expenditures. Giving a 2 percent wage increase to all employees would cost about $40 million next year, Pfutzenreuter said.

Salary freezes are also popular options for addressing budget difficulties on the federal and state level.

Two million federal workers will be affected by a two-year salary freeze passed by Congress in December that is expected to save $5 billion.

State employees could face a similar freeze based on a budget bill currently working its way through the Legislature.

The bill, which also includes a cut of $89.2 million from the UniversityâÄôs projected budget over two years, would indefinitely prevent state employees from receiving any wage or salary increases beginning July 1.

University workers would be unaffected by the state freeze, due to the schoolâÄôs charter, which gives it control over its employeeâÄôs salaries.

Rep. Keith Downey, R-Edina, who co-authored the House freeze bill, said that in addition to saving money, holding down state employee salaries will prevent steeper cuts.

“In other words, if wages donâÄôt increase, we wonâÄôt have to cut anybody through actual layoffs,” he said.

Rep. Lyndon Carlson, DFL-Crystal, said salary increases should be solved through the collective bargaining process and expressed concerns that a state-mandated freeze would impede those negotiations.

“What I see the salary freeze doing is interjecting into that process,” he said. “I think that would be the wrong way to go.”

The collective bargaining process will play an important role for the University as it works on its own compensation plans.

The contract for 1,600 clerical workers represented by AFSCME Local 3800 expires in June, and union President Phyllis Walker said any freezes would have to be negotiated in the new contract.

The current contract provided a single 2 percent wage increase between 2009 and 2011 and didnâÄôt allow for traditional “step increases” which reward employees for performance and time served at the University.

Walker said the union is still formulating its proposal, but will fight against a salary freeze on its workers, most of whom make less than $40,000.

Withholding a 2 or 3 percent increase will have a negative impact on employees, she said, and wouldnâÄôt go far in solving the UniversityâÄôs overall budget problems.

“Our position is, thereâÄôs a lot more money to be saved in cutting in middle management and the people at the top, because theyâÄôre the ones who make the big salaries,” she said. “We are trying to get some reasonable salary increases for our members because our members are hurting.”