AUGUSTA – Penny Whitney-Asdourian of Scarborough, who has been a state employee for more than 30 years, told lawmakers Wednesday that she and her co-workers should not be blamed for the state’s fiscal crisis.

“I am a loyal employee,” she said. “I am dedicated to the people I serve. I am a taxpayer and a volunteer in my community. But I am not the problem and I am not the enemy in this budget crisis, and I refuse to be identified as such.”

Whitney-Asdourian said state workers have lost longevity pay, had merit increases frozen, and have chosen to work for the state even though they could have made more money in the private sector.

She was one of about 70 current and retired state workers who testified against a series of changes to retirement benefits proposed by Gov. Paul LePage. Dozens more — many wearing purple Maine State Employees Association T-shirts — sat in rooms throughout the State House to monitor the hearing before the Appropriations Committee.

LePage took the unusual step of testifying before the committee, saying he believes the changes are needed to ensure the long-term viability of the retirement program.

“Ignored, the problem grows to the point where our biennial pension expenses will reach $1.5 billion by the end of the decade, consuming approximately one in every four dollars of general fund revenues,” he said. “If we let the problem get to this point, Maine’s defined pension system will cease to exist.”

The $6.1 billion state budget he has proposed for the next two years would freeze retirees’ cost-of-living increases for three years and reduce the cap on annual increases from 4 percent to 2 percent thereafter.

It also would increase the retirement age from 62 to 65 for new hires and workers with fewer than five years of service. It would increase by 2 percent the amount that current employees must contribute to the retirement system.

And it would change health care benefits for retirees, calling for longer terms of service to qualify, and for future retirees to pay an increased share of their health insurance costs. Those who retire after Jan. 1, 2012 would have to pay for 100 percent of their health insurance until they turn 65.

The state has a $4.4 billion unfunded pension liability that must be paid off by 2028. LePage’s proposal would reduce that liability by $2 billion and save $524 million over the next two years.

Sawin Millett, commissioner of the Department of Administrative and Financial Services, called the changes the “linchpin” of the two-year budget that will take effect July 1.

State Treasurer Bruce Poliquin and Tarren Bragdon, executive director of the Maine Heritage Policy Center and a member of LePage’s budget transition team, also testified in support of the changes.

But the six-hour public hearing was dominated by current and former state workers who said they have been unfairly targeted.

Workers used vacation time so they could testify, union officials said. Richard Behr of Vassalboro, a professional geologist and a 23-year state employee, said he wanted to speak out against the major changes that would affect his retirement benefits.

“I am outraged with the governor’s proposal to significantly reduce retirement benefits,” he said. “It is unreasonable for state employees to entirely bear the burden of decisions we had no hand in making.”

Lois Baxter of Orrington, who retired from the state’s human services department in 2007, said times are tough for people on fixed incomes.

“My disposable income will continually decrease over the next few years if the COLA is frozen and eventually capped at 2 percent,” she said. “Is this fair to those of us who went to work for the state in good faith, only to see those promises broken in the governor’s budget?”

Today and Friday, more state workers and teachers are expected to testify on proposed changes to retirees’ health benefits. State House rallies are planned today for and against the retirement system proposals.

Many who testified Wednesday said the reduction in benefits would come on top of unpaid days off and other cuts to their wages in recent years.

Cheryl Soucy of West Gardiner, who has been a chemist with the state for 21 years, said the proposal has caused her to wonder why she is being punished after many years of service.

“Change the contract for new hires if necessary, but stop breaking commitments to those of us that have served above and beyond for years,” she said.

MaineToday Media State House Writer Susan M. Cover can be contacted at 620-7015 or at:

[email protected]