Gov. Paul LePage last week tried to convince teachers that it was their union and Democrats’ fault that he was now telling them to contribute more to their pension system. He must be viewing history through Alice in Wonderland’s looking glass.
“You have been sold a bill of goods,” Gov. LePage said at a town meeting Friday in Saco.
Democrats, with teachers’ union support, caused the pension shortfall, he told the audience.
Gov. LePage, in this version of reality, is the savior who will fix the pension system by asking state employees and teachers — and only them, he exempted his own pension from a contribution increase — to make “shared sacrifice.”
A study commission looking at the state’s perennial pension shortfall in 1993-94 traced the problem back decades. In 1972, when Democrat Ken Curtis was the state’s governor, the pension shortfall was $263 million. A dozen years later — after independent James Longley had served a term and Democrat Joe Brennan was in the Blaine House — it had surpassed $1 billion, according to the commission’s report.
The problem was that the state, perennially short of money, was not making the required contributions to the pension fund. In addition, new benefits were added, without the necessary money being set aside. Democratic, Republican and independent lawmakers approved these moves.
In 1987, when Republican John McKernan was governor, the payback time for the growing unfunded liability was extended. This was done again two more times, when the governor and Legislature were desperate to balance the budget during a recession.
Gov. Angus King, an independent, also used this gimmick to make smaller payments toward the unfunded pension liability.
By 1995, the public had had enough and a constitutional amendment requiring that the unfunded liability be paid off by 2028 was resoundingly approved by voters. With that deadline looming, Gov. LePage and the Republican-controlled Legislature face growing payments each year.
There is plenty of blame to go around in the State House for the pension problems. But blaming teachers, who, unlike the state, made their contributions with every paycheck, is reprehensible.
Maine’s pension benefits — the average payout to retirees is $19,000 a year — are far from lavish, and they cost the state less than if Social Security were used instead of the pension system.
Still, Gov. LePage proposes to reduce the pension system’s unfunded liability by raising the retirement age for state workers and teachers by two years and putting cost-of-living adjustments on hold for three years and capping them after that.
He is also asking teachers and state workers to contribute an additional 2 percent of their salaries to the state retirement system (they already pay 7.65 percent). The state will reduce its contribution from 5.5 percent to 3.5 percent.
This will in no way reduce the unfunded liability because the amount of money taken in will be the same; state workers and teachers will just bear more of the burden. In fact, his budget will use some of the money the state won’t put into the pension system to pay for tax breaks and the $500 million in increased government spending in his budget.
Only in an upside down world are teachers and state workers blamed for a problem they didn’t create — and then told to pay to fix it.