Maine lawmakers pass $1.6 billion ‘messaging bill' to reverse cuts to state pension system
Passersby honk at Winnie Malia (right) and other state employees chanting along State Street in Augusta on Sept. 26, 2023. (Photo by Emma Davis/ Maine Morning Star)
Maine Legislators said they hope to send a message about the importance of public service with the passage of a bill that would undo previous cuts to the state pension system — to the tune of more than $1.6 billion.
In 2011, the Legislature and former Gov. Paul LePage made changes to the state pension system that capped cost of living adjustments at 3% and restricted that increase so that it would only apply to the first $20,000 (which has now increased to $24,000) of pension income. At the time, those cuts helped the state lower the top marginal individual income tax rate from 8.5% to 7.15%.
The House voted 81-66 on Wednesday following the Senate's 22-12 vote on Tuesday in favor of legislation (LD 900) that would undo some of those changes and tie the Public Employees Retirement System to the Consumer Price Index in an effort to help retirement accounts keep pace with inflation.
Speaking from the chamber floor Tuesday, Sen. Mike Tipping (D-Penobscot) noted the bill has a fiscal note of more than $1.6 billion due to the state pension system not having enough assets to cover the future cost of those changes.
'I have every confidence that my colleagues on the Appropriations and Financial Affairs Committee will find that money,' Tipping joked, 'but regardless of how it works out, this is an important reminder of how much we've taken from retirees to pay for tax breaks for the wealthy.'
However, critics said passing a bill with such a price tag would be irresponsible.
'We must legislate responsibly, balancing our obligations to retirees with a broader need for Maine's working families, businesses and public services,' Rep. Mike Soboleski (R-Phillips) said during the House debate, adding that if funded the bill would likely divert resources from education, health care, and other priorities.
Rep. Amy Roeder (D-Bangor) said although the bill is likely going to die on the appropriations table, where legislation not included in the budget vies for remaining funds at the end of session, she won't stop fighting for pensions. 'Every year we fail to restore these pensions, we are complicit in perpetuating the injustice,' she said.
Bill sponsor Sen. Joe Baldacci (D-Bangor) said over the last 15 years 'employees of the state have been shortchanged significantly,' noting the thousands of retired teachers and public workers impacted by the current structure. His hope is that over successive legislatures, this issue becomes a priority.
Before advancing to either the governor's desk or the appropriations table, the bill will go back to both chambers for final enactment votes.
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