Appeals court rejects GOP lawsuit over state worker pay raises

A Minnesota appeals court has rejected a Republican lawsuit over state government employee pay raises from 2020.

The three-judge panel said Monday that the GOP's case is moot because Minnesota ended its 2021 fiscal year with a surplus, a benchmark that Republicans had sought to use before allowing the raises through.

The pay increases became a political fight in summer 2020 amid fears that the COVID-19 pandemic would plunge the state budget into a deficit. The Walz administration had negotiated new collective bargaining contracts with the major public employee unions that included 2.5 percent raises for thousands of workers.

The DFL-controlled House approved the contracts. But the GOP-led Senate passed legislation making the raises contingent on maintaining a budget surplus.

Even though the House and Senate passed different bills, the Walz administration said the Legislature had ratified the contracts and quickly put the pay raises in effect. Administration officials concluded that lawmakers cannot modify contracts before them.

Republicans sued months later, arguing the Walz administration lacked authority to put disputed contracts into effect.

Yet a faster-than-expected economic recovery and billions of dollars in federal pandemic aid allowed the state to maintain a budget surplus. A district court ruled in 2021 that the GOP's lawsuit was therefore moot, and the appeals court agreed.