AUGUSTA, Maine — Tensions between public employee unions and the LePage administration were on full display Thursday as hundreds of demonstrators converged on the capital to debate a plan to force state workers to pay more for their retirement benefits.
Although far from the dramatic scenes playing out in Wisconsin and other states, Thursday’s events in the Maine State House echoed with the themes heard nationwide as policy makers attempt to deal with shortfalls in their budgets and pensions.
Unionized state workers and labor groups accused Gov. Paul LePage of attempting to balance the budget on the backs of public employees. They also suggested the Republican governor brought an anti-union agenda to Augusta.
“Every time they pull this, every time they try to roll over onto the workers of this state, who’s going to be here?” union organizer Mike Sylvester shouted to about 400 workers who shouted back, “We are!”
LePage and his supporters, meanwhile, said sacrifices must be made today in order to restore “fiscal sanity” to the state and ensure that the pension system is still solvent decades from now.
“We elected a new governor. We elected a new majority in the Maine House and Maine Senate,” said Ray Richardson, co-host of a news talk radio program, speaking at a morning rally. “The people of Maine said very clearly that we need a change of course.”
Thursday’s events highlighted the second day of public hearings in the Legislature’s Appropriations and Financial Affairs Committee on the most controversial aspects of the governor’s $6.1 billion budget plan.
LePage has proposed requiring state employees to pay 2 percent more on top of the 7.65 percent they already contribute from their paychecks to the pension system. The governor’s plan also calls for raising the minimum retirement age from 62 to 65 for workers with fewer than five years of service and freezing and then capping the cost-of-living adjustment for state retirees.
Administration officials estimate the pension reform proposals will save more than $400 million in the upcoming two-year budget cycle and reduce the current $4.3 billion unfunded pension liability by more than $2 billion over the long term.
Speaking publicly on his budget for the second day in a row, LePage told a crowd of 70-plus supporters that his administration is living up to his campaign pledge to tackle Maine’s financial challenges.
“Everybody is going to have to share the pain,” LePage told the group huddled together in single-digit temperatures with wind chills approaching 10 degrees below zero.
“And we must be doing our job because everybody out there, every single constituency, is looking at their needs and complaining about what we are trying to do,” the governor said. “Folks, the only one that hasn’t been complaining is those who are paying the bills.”
Although LePage and rally organizers said they were not against state workers, signs in the crowd spoke to an anti-union sentiment among some. Among them were signs that read “Union Greed Bankrupts Maine” and “Stop Complaining — Taxpayers Have Given Enough.”
Moments later, those LePage supporters intermixed with hundreds of representatives of the Maine State Employees Association and other unions as both groups lobbied lawmakers in the corridor between the House and Senate chambers. State House security was beefed up in anticipation of Thursday’s showing although there were no problems.
At noon, it was the MSEA members’ turn to occupy the bitterly cold courtyard between the State House and the Cross Office Building. The crowd of more than 400 people chanted pro-union slogans and listened to speakers denouncing LePage’s budget proposals.
Retiree Brenda Kaler said she receives a pension of $1,380 a month — or $16,560 a year — in return for the 36 years she worked for the state. She has not received a cost-of-living adjustment, or COLA, since retiring four years ago and, under LePage’s plan, would not receive an increase for at least another three years.
“I think that is a modest pension to say the least, especially considering the fact that I am ineligible for Social Security because I am a state retiree,” Kaler said. Most longtime state employees are ineligible for Social Security because they instead pay into the state’s pension system.
Other speakers accused the governor of taking money from state workers in order to give tax breaks to the wealthy. LePage has proposed increasing from $1 million to $2 million the exemption from estate taxes, which are levied on heirs who inherit assets including property or businesses.
“It is wrong to take another 2 percent of my pay to give tax breaks to the multi-millionaires of Maine,” said Tamra Keaton, a Caribou resident who works for the Maine Department of Health and Human Services. “It is wrong to take hundreds of millions of dollars out of the pockets of Maine workers and retired workers to pay for over $200 million of income tax breaks for Maine’s wealthiest residents.”
The activity then returned to the legislative chambers as members of the Appropriations Committee heard several hours of testimony from about 40 people on proposed changes to state employees’ health care benefits.
Some speakers tearfully told how the increased health insurance costs for state employees or retirees will make it even more difficult for them to keep their heads above water financially.
Others spoke angrily about how they took lower-paid jobs with the state because the benefits were good only to see that promise broken decades later. One of the most contentious proposals is to require anyone who retires from state service before age 65 — regardless of their years of service — to pay 100 percent of their health insurance premium until they reach 65.
Will Towers, a correctional officer in his mid-40s, said that would mean he would have to pay $800 a month until he hits 65 despite having already spent more than two decades with the state.
“I don’t think it is fair to ask any correctional officer to be rolling around on the floor … at age 65 trying to keep prisoners in line,” Towers said.
Although outnumbered, there were several supporters of LePage’s budget plan. Among them was Ted Cowan of Rockland, who said public-sector unions have led states toward bankruptcy by constantly negotiating higher wages and better benefits.
But Cowan said state workers are not to blame. Instead, he said state leaders kept kicking the can down the road.
“We are not at the end of that loop,” said Cowan, who was a member of a union in the private sector. “We are far beyond the point where we can pay that bill. And the people that did this are your predecessors and union leaders,” he told the committee.
All of the recent talk of a “pension crisis” from administration officials is not sitting well with Democratic lawmakers, however.
Democrats pointed out that the pension system currently has $10.3 billion — enough to pay for 15 years worth of benefits even if not another penny was added to the fund. A Pew Research study also described Maine’s plan as a “strong performer” relative to other pension systems.
While acknowledging the state must address the unfunded liability, they said the situation is not nearly as dire as LePage, Treasurer Bruce Poliquin and others have suggested.
“It’s not a crisis. It is a fiscal challenge and a balancing act,” said Rep. David Webster, a Freeport Democrat who serves on the Appropriations Committee.
Public hearings will continue on Friday when members of the state teachers union are expected to testify about changes to their retirement and health insurance benefits.