Despite what you hear from Augusta, Maine’s public employee retirement system is well-managed — it earned more than $1 billion in the last six months.
Yet, the state pension system is in political trouble.
One reason is that right now — maybe it’s always been the case — it’s OK to bash people who work for the government. They’re “bloat,” part of the problem of a government that has outgrown its usefulness and has nearly bankrupted the state in the process. Or so the story goes.
The faceless bureaucrat has become the scourge of the economy and has been set up as the target for the rage caused by a recession-battered economy and a feckless Wall Street.
The schoolteachers, social workers, state troopers, corrections officers, forest rangers, scientists and doctors who devote their lives to public service have been labeled part of the problem.
But they’re not faceless. And they’re not nameless.
Consider Lois Baxter, who lives in Orrington. Ms. Baxter spent 31 years working for the state, helping people while working in the Department of Health and Human Services. She raised two children as a single parent.
Her monthly pension is $2,866, or about $34,000 a year.
Now in retirement, she works part time at the Bangor Y, where she helps women who are fighting breast and cervical cancer.
She is unlikely to ever collect Social Security even though she has, and is, paying into the system.
For Ms. Baxter, her pension is food on the table, a roof over her head and security as she gets older.
Ms. Baxter tells me she’s worried. And she should be.
There’s a concerted effort to demonize state workers and retirees. It’s happening in Maine and around the country. And public employees are one of the biggest targets.
While you’d never know it from the political rhetoric, Maine’s pension system actually does pretty well when compared with others.
The Pew Center on the States, which last year published a study of funding problems for state public pension plans, called Maine a “solid performer.” New Hampshire has “serious concerns.”
Since June 30, the system’s assets have grown in value by more than $1 billion, to about $10.3 billion, fueled by the economic recovery.
But like almost every other state, Maine does have a problem.
The cost of state employee and teacher pensions and the unfunded liability that built up decades ago are taking an ever-greater portion of the state budget. Without changes or a resurgent stock market, the costs could crowd out other important government obligations.
But here’s the pickle.
Maine already has adopted many of the reforms other states are implementing.
For example, last year Virginia and Wyoming changed their pension systems to require employees to contribute a portion of their paycheck. Maine already requires workers to contribute 7.65 percent of their pay, while the state contributes 5.5 percent. For a benchmark, switching to Social Security would split the cost evenly at 6.2 percent, increasing the cost to the state and to taxpayers.
Colorado raised its retirement age from 55 to 60. In Maine, the retirement age for most state workers is 62. It went up in the 1990s for workers who had less than 10 years of service.
Minnesota and South Dakota limited cost of living increases and Colorado capped them. In 2010, Maine retirees received no COLA.
Fewer than half of all state workers or teachers vest in the pension system because they leave their job before five years. And less than 20 percent of employees make it to 25 years or more. When they move on, they leave behind the state-share contribution, which helps to balance the books.
There will be plenty of ideas that try to stick it to teachers and retirees. And some of them might even make sense if considered individually. But watch out for the unfairness of multiple, reasonable sounding proposals when they are stacked on top of each other.
There are reasonable fixes to be had if, as a state, we stop treating state employees and teachers like the enemy and instead work together for a solution.
We have an obligation to take care of the people who have been taking care of us. The question is how.
David Farmer is former deputy chief of staff and communications director for Gov. John E. Baldacci. A longtime journalist, he has been an editor and reporter in Maine, Maryland, Virginia and Washington, D.C. You can reach him at email@example.com.