State worker benefit cuts focus of budget hearings

Posted Feb. 09, 2009, at 8:51 p.m.

AUGUSTA, Maine — State employees urged lawmakers Monday to revisit a cost-cutting provision in the governor’s budget that would require many state workers to pay a portion of their health insurance premiums.

The first day of public hearings on Gov. John Baldacci’s proposed $6.1 billion biennial budget was largely mundane as administration officials walked legislators through cost-saving proposals in about a half-dozen state agencies.

Faced with an estimated $838 million revenue shortfall, the Baldacci administration has outlined plans to eliminate more than 200 positions and reduce spending throughout state government during the two-year budget that begins in July.

The most lively discussion came late Monday when state employees got the chance to weigh in on a proposal to require government workers who earn $50,000 a year or more to chip in 5 percent of the cost of their health insurance premiums. Those making $90,000 would have to pay 10 percent. The state now pays 100 percent of the premium for all employees.

Sgt. Michael Edes, president of the Maine State Troopers Association, told members of the Appropriations and Financial Affairs Committee that he gave up five years worth of retirement savings when he left a local police force 23 years ago to join the state police.

Edes said one major draw was the benefit package offered by the state, including the health insurance program.

“You offered, I accepted and here we are,” Edes said. “Now, 23 years later, the bill before you today … breaks that promise.”

Irene Chandler, a senior revenue agent with the Maine Revenue Service in the Bangor area, said many state employees can earn significantly more working in the private sector. Weakening the benefit package makes the state even less competitive, she said.

“Is this really worth losing good, professional state workers over?” Chandler said.

The Baldacci administration estimates that its plan to make higher-paid employees share more of the burden of health insurance costs would save the state more than $1 million a year. Approximately 2,500 of the state’s 14,000 employees would be affected.

Employees making $50,000 a year would have to contribute slightly more than $400 under the plan, according to calculations based on figures supplied by the governor’s office. Those making $90,000 or more would pay about $810 more annually.

Ryan Low, commissioner of the Department of Administrative and Financial Services, said the administration looked at a number of options, including spreading the cuts across all 14,000 employees.

“Ultimately, the governor felt that … asking employees who might be making minimum wage or slightly more than that to pay more for health insurance didn’t make as much sense in the current economy,” Low said Monday evening in an interview.

But employees told lawmakers that the State Employee Health Commission should decide where to allocate the cuts, not the executive branch or the Legislature. Most of the members who spoke were members of the Maine State Employees Association union.

Arthur Branagan, a regional supervisor for the Department of Health and Human Services in Bangor, said he was more concerned about the precedent than the actual dollar amount employees would lose. He worried that the next time the state is in financial trouble, it would be applied to those making $40,000 a year.

“It’s a foot in the door,” Branagan said.

The appropriations committee has scheduled four weeks of public hearings on the governor’s budget bill. Lawmakers are expecting an even bigger crowd this Wednesday when the committee reviews provisions to close several housing units and eliminate dozens of positions at correctional facilities, including those in Charleston and Machiasport.

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