AUGUSTA – Maine’s unfunded state pension liability isn’t exactly a hot-button topic, but its growing impact on the state budget is making it an issue in the governor’s race.

The retirement system administers pensions for thousands of former state employees and teachers. Its cost in the two-year budget that starts July 1, 2011, will be more than $900 million — almost a third more than during the current budget.

Those costs will continue to rise until 2028 — the year the state is constitutionally obliged to square the books on the liability.

State Rep. Meredith Strang Burgess, R-Cumberland, forecasts “a permanent budget mess” and “a train wreck waiting to happen.”

“It should be an issue and we want to make it an issue” in the gubernatorial campaign, said Maine Republican Chairman Charles Webster, adding that his party’s candidate, Paul LePage, “is the only candidate who’s going to address it.”

As a veteran legislator, Democratic candidate Libby Mitchell is familiar with the issue. She says it has already come up and will continue to do so as the campaign goes on. Independent Eliot Cutler calls it a “ticking time bomb” that’s worthy grist for campaign give-and-take.

The unfunded liability that had been tabbed at $3.1 billion suddenly grew to $4.4 billion amid the world financial collapse of 2008-09.

To retire the liability, the state has to make up $8.9 billion in payments in the years ahead up through fiscal 2028, said Grant Pennoyer, director of the Legislature’s Office of Fiscal and Program Review. Roughly 80 percent of the total must come out of state revenues, he noted.

As the pension bill rises, it will gobble up bigger bites of state revenues and create tougher choices for lawmakers who have to fund other programs.

The House chair of the Appropriations Committee, Rep. Emily Cain, believes lawmakers will be up to the task.

“I’m not a doom and gloom person,” said the Orono Democrat. She said the track record of the Legislature in recent years, in which it has dealt with massive revenue shortfalls without broad-based tax increases, gives her confidence the pension obligations can be met without serious bloodletting.

“It’s not a new expense for state government,” Cain said.

Maine is not alone in having to pick up the pieces of underfunded and recession-ravaged pension systems.

It is one of 14 states where workers who are included in the state pension program do not participate in the Social Security System. Now, the idea of restructuring Maine’s pension system so it’s based on Social Security is being considered.

A study submitted to Maine lawmakers this year looks at a system that would affect new state employees and teachers hired after Dec. 31, 2010. Once phased in, Social Security would cover part of state retirees’ benefits and the state pension would pick up the rest. Private companies often have similarly mixed benefit packages.

The Social Security option — one of seven outlined in the Maine Unified Retirement Plan Task Force report — is championed by state Sen. Peter Mills, who sees it as a way to make benefits portable when workers leave public service. It would accommodate workers who today tend to move more often to new jobs.

Under the present system, the Cornville Republican says, those who leave the system before retirement usually relinquish all the contributions that the state has made on their behalf.

The report also says retaining the current system offers the lowest cost of the seven options studied.To retire the liability, the state has to make up $8.9 billion in payments in the years ahead up through fiscal 2028.