Compensation council adopts inflation‑plus plan for most agency heads, excludes four new positions for separate review

The Minnesota Compensation Council adopted an inflation‑based approach—3.9% in the first year and 4.0% in the second year—as its recommendation for most state agency heads. The council explicitly excluded four newly created or high‑priority positions (chief executive officer for Direct Care & Treatment, commissioner of Children, Youth & Families, director of Emergency Medical Services, and executive director of Cannabis Management) to be set separately.

Staff presented three options for agency heads: Option A (MMB’s 5.5% then 4.5%), Option B (Hay‑point/market adjustments), and Option C (inflation). Debate focused on the tradeoffs between gradual, market‑based and inflationary approaches; members raised concerns about parity with deputies, the budget environment, and whether some newly structured agencies required higher, targeted pay to recruit specialized leaders.

A motion to adopt the inflation plus one‑point compromise (3.9%/4.0%) carried after an amendment passed to exclude the four specified positions for separate deliberation. The exclusion allowed the council to apply the inflationary recommendation across the long list of traditional agency heads while reserving deeper review for positions judged unique by structural change or urgent operational need.

Why it matters: The decision establishes a consistent, administratively simple recommendation for the bulk of agency heads that staff can incorporate into projection tables; by isolating four exceptional roles, the council preserved the option to set higher, evidence‑based salaries where duties and market conditions justify them.

Next steps: Staff will model the budgetary impact of the adopted 3.9%/4.0% path across the affected salaries and will prepare separate analyses and proposed figures for the four excluded positions.