AUGUSTA – Chanting and waving signs that said “I am not LePage’s piggy bank,” retired state workers and teachers rallied at the State House on Wednesday to protest Gov. Paul LePage’s proposed changes to their pension benefits.

The workers hoped to turn up the heat on state lawmakers, who are in the midst of negotiating the $6.1 billion spending plan covering two years beginning July 1. The Appropriations Committee hopes to vote out an amended budget proposal by the end of the week.

Jackie Roach of Oakland, who retired in 1994 after 38 years as a teacher, urged the crowd to call lawmakers and tell them to reject LePage’s pension proposals.

“It’s wrong for Gov. LePage to pay for his tax breaks for Maine’s wealthiest residents by cutting the pensions of Maine’s retired workers,” she said.

LePage’s budget would freeze cost-of-living increases for retired teachers and state workers for three years and then reduce the cap on increases from 4 percent to 2 percent per year. Those changes would save the state $214 million, said Department of Administrative and Financial Services Commissioner Sawin Millett.

The governor is also proposing about $200 million in tax cuts, which the administration says would benefit about two-thirds of all taxpayers. The budget would lower the top income tax rate from 8.5 percent to 7.95 percent and allow a family of four to earn up to $35,750 before paying state income tax — the current threshold is $21,400.

Millett said that in preparing the budget, the administration tried to balance the need to address short- and long-term debt in the retirement system — it has an unfunded liability of $4.1 billion that must be paid by 2028 — and the need to stimulate the economy.

“We tried to look at the impact on a variety of constituencies,” he said. “By getting our debt under control and dealing with the retirement system growth curve, it will help retirees be secure in the knowledge that the system will be there for them.”

The retirees protesting Wednesday said they don’t feel they should lose benefits to pay for tax cuts, particularly for wealthy taxpayers. Earners of more than $120,000 a year would save an average of $998 in the LePage budget, according to Maine Revenue Services.

Retired state worker Brenda Kaler of Augusta said her pension is $16,560 a year and as a state worker, she gets no Social Security benefit.

“So when you look at my pension, and look at Gov. LePage’s tax giveaway, I can’t help but get angry,” she said.

Lawmakers are already discussing ways to alleviate the impacts of LePage’s proposals on retired workers. His original budget called for retirees to pay a portion of their health insurance — 5 percent, 10 percent or 15 percent based on the value of their retirement benefit.

Rep. John Martin, D-Eagle Lake, has offered an amendment that would eliminate the retiree insurance payments, and that identifies other funding to make up for them. The amendment has yet to be voted on by the full committee, but has the support of the Maine State Employees Association, the Maine Education Association and other committee Democrats.

“You’re talking about two groups of people who commitments have been made to over the years,” Martin said. “It’s simply not fair or equitable to turn our backs on an agreement that was made.”

And while Wednesday’s rally focused on changes to retiree benefits, LePage’s budget also would have active state workers contribute an additional 2 percent of their pay toward their retirement plan while cutting the state’s contribution. It also would cut spending on Maine Public Broadcasting and on Medicaid health insurance and other benefits.

Wednesday’s rally was a warm-up for a major union protest planned for today that is expected to draw several hundred people. Today’s protest will focus on a bill that would eliminate mandatory service fee payments by nonunion state workers who are represented by collective bargaining agreements.

The House on Wednesday killed a companion bill, L.D. 788, the so-called “right to work” bill that would have given public and private sector workers a choice on whether to join a union. It would have prohibited employers from deducting fees from nonunion employees.

As budget negotiations continue, lawmakers are working to find alternatives that will be acceptable to Democrats and Republicans alike. The budget will need support from two-thirds of lawmakers to pass the House and Senate, which means the final product must have bipartisan support.

“I don’t think Democrats or Republicans on Appropriations collectively want to do the damage the governor’s proposal makes to the system,” Martin said.

 

MaineToday Media State House Writer Susan Cover can be contacted at 620-7015 or at scover@mainetoday.com