AUGUSTA – The contentious proposal to eliminate the Labor Committee in the Legislature is perhaps the first salvo of a longer clash between organized labor and new majority Republicans.

Central to this debate will be $4.4 billion in unfunded pension obligations and the preservation of state jobs. Labor unions in Maine also fear the introduction of policy initiatives, such as so-called “right-to-work” legislation, will weaken their influence.

The session is going to be contentious, said Rep. Richard Cebra, R-Naples, who has put forth legislation to address the pension debt by raising workers’ contributions by 1 percent for six years and eliminating cost-of-living increases for retirees with pensions of more than $45,000 annually.

“This is going to be a knock-down, drag-out fight,” he said. “There are gut-wrenching things we’ve got to look at.”

Cebra, who also sits on the Legislature’s Rules Committee, said he’s getting calls from union members who oppose a Republican proposal to eliminate the Labor Committee, which has jurisdiction over issues such as the pension system, workplace safety and wage laws.

The Rules Committee will convene this Wednesday on that issue and make a recommendation for the full Legislature to consider. 

Other tough fights are expected over the budget and its impact on a state work force Gov.-elect Paul LePage described as a “bloated bureaucracy” during his winning campaign.

In a televised interview with WCSH’s Bill Green earlier this month, LePage said he planned to eliminate 10 percent to 15 percent of the state work force over the next four years.

Many state workers are hoping that, as governor, LePage will be more reasonable than his campaign rhetoric, said Mary Anne Turowski, a lobbyist for the Maine State Employees Association, which represents 10,000 state workers.

She said the union is willing to negotiate. But, at the same time, the union also is working with others across Maine on a coordinated political strategy.

The LePage administration will also negotiate pay and benefit packages for state workers. The contracts that cover most of them expire June 30.

In doing so, LePage will look for savings and efficiencies on behalf of Maine taxpayers without worrying about satisfying any political debts, said his spokesman, Dan Demeritt.

He said LePage is willing to have “fair and open” negations with union leaders who work with him in good faith.

“We are not looking to settle political scores,” Demeritt said. “We are looking for a state government that we can afford and works efficiently. Public service is his approach. To the extent the focus is on anything but that, he will have a problem.”

The stakes for union members have never been higher, said Chris Quint, the employees association’s executive director.

“We are mobilizing members for what we call the fight of their lives,” he said. 

The complexity of the state pension liability makes it a daunting challenge.

Unions and the administration need to address the payment of future obligations for workers. But they also likely will have to consider plans by lawmakers to change retirement plans for new workers — perhaps by creating a plan modeled on the private sector, such as a 401(k), or enrolling Maine’s workers in Social Security.

While the savings plans would offer workers the ability to keep their money when changing jobs, workers would also assume all the risk of that investment. The state would not be liable for guaranteed payments, as it is today.

The Maine Constitution requires the unfunded $4.4 billion liability to be retired by 2028, which means the state must start making increasingly larger payments in coming years to keep pace. The cost of interest under the current payback schedule brings the price tag to nearly $9 billion.

In five years, those annual payments may reach $700 million, incoming state treasurer Bruce Poliquin said, and consume so much of the state budget that the state may not have money for basic services, such as funding schools or repairing roads and bridges.

“We have been hired by the taxpayers to fix the problem,” Poliquin said. “We don’t have any other strategy other than to tell the truth that the pension system is no longer fiscally sustainable.”

Democrats agree the unfunded pension liability must be addressed with the best interests of workers in mind. House Minority Leader Emily Cain, D-Orono, said lawmakers should not impose solutions that would make it difficult for the state to maintain a dependable work force.

“We have to pay it,” she said of the unfunded liability. “That goes without saying. But no matter who is in charge, you want a state work force that is strong, that is committed, that is loyal and doesn’t turn over all the time.”

Labor leaders say current workers, who put 7.65 percent of their pay into the plan, should not be punished because of the 2008 stock market crash that eroded the plan’s investments — and the decision made by past legislatures and governors to not fully fund the repayments.

Labor leaders want to address the unfunded liability by extending the 2028 deadline — essentially refinancing the debt — so the payments would be more manageable.

That would require a constitutional amendment, however. 

While labor leaders said they will meet with lawmakers and LePage officials to negotiate some issues, such as the pension liability, they also indicated a willingness to fight over others — particularly if measures they fear, such as “right-to-work” proposals, are introduced.

Enforced in 22 states — but none in the Northeast — “right-to-work” prohibits agreements between unions and employers to make union membership or payment of union dues or fees a condition of employment.

“This will be a line in the sand — a major campaign fight for us that we will oppose very aggressively,” said Matt Schlobohm, executive director of the Maine AFL-CIO, a coalition of 150 unions that represents 30,000 workers.

MaineToday Media State House Writer Tom Bell can be contacted at 699-6261 or at:

[email protected]