AUGUSTA, Maine — Union members upset with Maine Gov. Paul LePage’s pension proposals faced off Wednesday with LePage supporters as the Appropriations Committee met in Augusta to begin examining the governor’s plan to fix the state’s retirement system.
The committee heard from foes and fans of the governor’s proposal to change how Maine’s pension system is funded in an effort to help reduce its $4.3 billion shortfall. The governor’s proposal is projected to result in $524 million in savings during the state’s next two-year budget and cut the shortfall in half to $2.2 billion.
But supporters of LePage’s proposal, including the governor himself, told the committee that the pension system is a fiscal mess and is taking money away from education, roads, public safety, health care and other government services.
Sacrifice is painful, but it’s necessary, LePage said. Without action, pension expenses will exceed $1.5 billion during each two-year budget cycle — or about 25 percent of general fund revenues — by the end of the decade, he said.
“If we do not act, people in this room will be forced to make funding decisions so dire that our current state retirement system will have to be cast aside,” he said.
Hearings began this week on LePage’s proposed $6.1 billion budget package for the two-year period beginning July 1. The Appropriations Committee is scheduled to take up state employee and retiree health insurance proposals on Thursday, and teacher retirement contributions and eligibility on Friday.
The proposals have rankled state union members, who say they are being treated like “second-class citizens” and burdens on the system rather than assets.
Before Wednesday’s hearings, more than 100 supporters and critics of LePage’s proposed budget gathered in the Hall of Flags outside the Appropriations Committee hearing room.
Budget supporters held signs with slogans such as “End Union Greed” and “You can’t Spend What You don’t Have. Support the Budget.”
Tim Lajoie, 44, of Lewiston held a sign that read “Greedy” above the logos of four employee unions. Lajoie said he is a union member himself as a public safety dispatcher, but thinks it’s time for unions to sacrifice for the public good.
“They want more, they want more, they want more,” Lajoie said. “It’s time say, ‘Hey, look, we have to be responsible.’”
Across the room, union employees wore purple T-shirts saying “Stronger Together” on the backs.
Cathy Green, who works for the Department of Conservation, said unions are important to protect employee rights and ensure fair benefits, including pensions.
“You know, I’m a taxpayer too and I’m not greedy,” she said.
Inside the hearing room, people lined up to give their allotted three minutes of testimony to the committee.
Maine State Treasurer Bruce Poliquin said he’s well-aware that the “fiscal monster” of the pension system wasn’t created by the 70,000 active and retired state employees and teachers. Fixing the pension system, he said, will have the added benefit of helping the state’s business climate.
“Addressing our growing pension problem will send a strong, positive message of fiscal discipline to the business community and to bond rating agencies,” he said. “Entrepreneurs, and the jobs they create, are attracted to states where they don’t have to worry about taxes going up, or services being cut, to fund public debt like our pension liability.”
But that doesn’t make the pension cut proposals any easier for the likes of Penny Whitney-Asdourian, a longtime state employee from Scarborough. State employees have given back over and over, she said.
“When previous administrations chose not to pay their share into my pension, I paid my share and I paid it on time,” she said. “When the state faced hard times and ‘borrowed’ from my retirement in order to balance the budget and avoid cuts that would hurt all Maine citizens, it wasn’t right, it wasn’t fair, but it was done nonetheless.”