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Legislative News and Views - Rep. Jim Nash (R)

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RELEASE: House Republicans question improper bonus payments

Thursday, April 6, 2017

ST. PAUL – Yesterday, WCCO reported that the Office of the Legislative Auditor has opened an investigation into the state’s gainsharing program. The program was developed as an incentive for employees whose work product produced documented savings of taxpayer dollars within state agencies.

In total, the Dayton administration awarded $6.7 million to state employees through this program. Current statute states the award can be up to ten percent of documented savings, which would total at least $67 million of savings for the state. Despite state law mandating the documentation of savings in order to award monetary compensation, Minnesota Management and Budget has no record of any savings for taxpayers.

“During our March 28 State Government Finance Committee hearing, neither Commissioner Frans nor his staff could account for one dollar out of the $67 million the state should have saved,” said Rep. Jim Nash, R-Waconia, Vice-Chair of the State Government Finance Committee. “Instead, employees were rewarded for having a ‘can-do attitude’ and doing ‘outstanding work’. That’s called doing your job. It’s clear this program is being misused by the Dayton Administration.”

Questions relating to gainsharing is the latest in a series of compensation-related concerns that have arisen in Governor Mark Dayton’s tenure. Executive bonuses for MNsure managers1, severance payments for resigning officials2, large bonuses to commissioners3, and perks and exclusive financial benefits for the Minnesota Sports Facilities Authority Chair4 preceded the exposure of the misuse of the gainsharing program.

“To call this a waste of taxpayer dollars is quite an understatement,” said Rep. Sarah Anderson, R-Plymouth, Chair of the State Government Finance Committee. “Between improper bonuses and the misuse of stadium suites by MSFA board members, it fits the pattern of continued abuse and disregard for taxpayers by Governor Dayton and his administration.”

The House State Government Finance Omnibus Bill, calendared for a floor vote Thursday, addresses the issue by requiring monthly reports on the gainsharing program including documented cost savings and the amount of compensation awarded.

“Our legislation creates accountability to ensure the state is using this program to actually save taxpayers money, rather than the current system of doling out bonuses for simply doing one’s job,” said Rep. Bob Vogel, R-Elko New Market.

Along with proposed legislative reforms, Legislative Auditor Jim Nobles will investigate the gainsharing program over the coming weeks and months.

“It’s clear the Dayton administration continues to prioritize state employees and political allies over hardworking Minnesotans,” said Nash. “I expect the auditor’s report to shed some light on this misuse of the gainsharing program.”



IMPROPER BONUSES: As reported Wednesday evening, the non-partisan Office of the Legislative Auditor (OLA) has opened an investigation into the state’s gainsharing program. This Republican-led provision was passed during the 2011 Special Session, and directed the commissioner to establish a “onetime bonus compensation to state employees for efforts made to reduce the costs of operating state government or for ways or providing better or more efficient state services.” The statute goes on to read that the commissioner may authorize a onetime bonus to employees (emphasis added) “whose suggestion or involvement in a project is determined by the commissioner to have resulted in documented cost savings to the state.”

The Dayton administration has paid out $6.7 million in gainsharing bonuses, but required documentation of savings through the program does not exist. WCCO reported that Frans claims "it's not possible to document savings on any state program."

PERKS FOR MSFA CHAIR: Chair of the Minnesota Sports Facilities Authority Michelle Kelm-Helgen was among several board members who misused taxpayer-funded stadium suites to invite friends, family and political allies to events. Additionally, she used her position as MSFA Chair to cut in line to secure prime stadium season tickets for herself and her friends ahead of longtime Vikings season ticketholders.

IMPROPER SEVERANCE PAYMENTS: Last fall, APM Reports reported on more than $80,000 in severance payments improperly made to Dayton commissioners who voluntarily resigned. Compensation for commissioners is governed by the Managerial Plan which is ratified by the legislature and generally does not allow for severance of this amount for commissioners who resign voluntarily. None of the commissioners who received payments met any of the criteria under which severance may be paid, and payments exceeded the amounts specified under the terms of the Managerial Plan.

COMMISSIONER PAY RAISES: In July 2015, Governor Dayton awarded thousands of dollars in pay increases to commissioners in a move that drew bipartisan opposition and significant outcry from the public.

MNSURE BONUSES: While Minnesotans struggled with the disastrous launch of the failed MNsure website in fall of 2013, MNsure managers were awarded more than $32,000 in bonus payments by April Todd-Malmlov, the former MNsure Executive Director appointed by the Dayton-appointed MNsure Board of Directors.