AUGUSTA, Maine — Gov. Paul LePage’s proposed $6.1 billion budget calls for most public employees and teachers to contribute an additional 2 percent into their pensions. The administration has described the proposal as a “shared sacrifice” plan designed to plug the state’s budget gap.
But LePage’s decision not to contribute more to his own pension benefit has prompted critics to claim the governor has exempted himself from his budget mantra while missing an opportunity to lead by example.
That was the argument advanced by Mike Tipping, a progressive activist, in an opinion piece published in Sunday’s Kennebec Journal/Waterville Sentinel. Tipping works for the Maine People’s Alliance, a group that has played foil to LePage since the election.
Tipping said the governor’s decision not to voluntarily contribute an additional 2 percent to his state pension while asking teachers and state workers to pay more showed that LePage’s budget was politically tone deaf.
“He said he wants the spirit of shared sacrifice and yet he’s exempting himself,” Tipping said.
Tipping acknowledged that the governor’s 2 percent additional contribution would make a small dent in the $6.1 billion spending plan. However, he said it would constitute a symbolic gesture for the public employees and teachers who will see a $2.1 billion reduction in benefits and who have already lost $150 million in wages and benefits in previous budgets.
“It’s obviously not a big part of the budget, but it’s a microcosm of the rest of his budget, which is unfair to teachers, state employees, the poor and homeowners,” Tipping said.
Dan Demeritt, LePage’s spokesman, said he wasn’t aware if upping the governor’s contribution was part of the administration’s budget deliberations. He said LePage’s proposal focused on big-ticket items that would plug the state’s budget gap.
“We don’t spend a lot of time trying to find those little angles, as may be evident by what you see here and what you write about,” Demeritt said. “We try to solve problems. We don’t spend a lot of time trying to cover a political angle.”
Demeritt also noted the governor’s $70,000 annual salary is the lowest among all states’ chief executives. According to a 2009 analysis by the Council of State Governments, the average governor’s salary is $131,000.
Some governors have waived their compensation.
The Legislature hasn’t raised the governor’s salary since 1987.
LePage has previously said he took a two-thirds pay cut to become governor of Maine. He was previously the general manager for Marden’s Surplus & Salvage.
According to statue, the governor contributes 7.65 percent of his salary to the Governor’s Retirement Fund. After he leaves office his pension will pay him three-eights of his annual salary, about $26,000 per year.
The governor is also immediately vested in the system. By contrast, the average public employee or teacher would have to work more than 20 years to receive the same pension.
LePage’s budget proposes that all public employees, including so-called confidential employees that include his senior staff, pay an additional 2 percent into the pension system.
Regular employees now pay 7.65 percent of their pay into the pension fund and the state adds another 5.5 percent. Under LePage’s proposal, the 7.65 percent would go up to 9.65 percent, while the state’s share would also decrease.
The administration says the plan would immediately save $2.1 billion from the $4.4 billion pension debt.
LePage’s supporters have said Tipping’s criticism is off the mark, citing a provision in the Maine Constitution that prohibits him from changing his compensation while in office.
However, the administration hasn’t deployed the constitutional defense, perhaps because previous governors have reportedly sought separate statutory changes to their compensation to match their budget messaging.
In LePage’s proposal, the governor isn’t the only public employee exempted from the pension contribution hike. According to Demeritt, both the legislative and judicial branch will make the same contributions to their retirement plans as they are currently.