In an address to state legislators on February 10 previewing his proposed state budget, Governor LePage proposed permanently taking $524 million from the pensions of State of Maine retirees and retired public school teachers. We have serious concerns about this proposal and its effect not only on retirees and their families, but also on its potential impact on the ability of the State of Maine and Maine's public schools to recruit and retain talented staff. One encouraging development in the Governor's budget address was his statement that his proposal has "no mass layoffs" and "no furlough days." We are encouraged that his budget proposal appears to keep people working.

 

READ THE BUDGET ADDRESS

Read the Governor's budget address here.

 

FORMAL BUDGET DOCUMENTS NOT YET RELEASED

The Governor hasn't yet released his actual proposed state budget. As soon as those budget document are released, we will examine them for possible impacts on the public services provided by our members, and for potential impacts on the wage and benefits package of our members. We are expecting their release on Friday, February 11. The information in this communication is based on the Governor's address to lawmakers.

 

PENSIONS

In his budget address, the Governor proposed freezing cost-of-living increases to retirees and permanently reducing the amount of any ensuing cost-of-living increases. We have heard that his proposed freeze on cost-of-living increases would be for three years and that he would then reduce any subsequent cost-of-living increase to a maximum of 2 percent annually. Currently the maximum cost of living increase is 4 percent based on the Consumer Price Index. Our members understand the importance of shared sacrifice, yet the Governor's proposed budget appears to disproportionately target retirees. This is confusing to us given the Governor's stated determination to look out for the elderly in his proposed state budget. He also pledged to look out for veterans, and many of our retiree members are veterans.

 

RETIREMENT AGE

In addition, the Governor proposed raising the retirement age, to 65, for "new and recent hires." Further information wasn't available today.

 

RETIREE HEALTH LIABILITY

The Governor referred, without elaboration, to proposed changes that would "reduce our retiree health liability by almost $1 billion."

 

'CONTINUED SHARED SACRIFICES'

The Governor said, again without elaboration, "There will be continued shared sacrifices for members of our state workforce. But people who work for Maine can expect to earn more next year than they do today."

 

RETIREMENT INCENTIVE

The Governor said that the proposed budget "includes a retirement incentive for state workers" for "age-eligible employees who leave the workforce before the end of this calendar year." He described the incentive as a "small cash payment." We will follow up with more information as it becomes available.

 

WE WILL FOLLOW UP

Again, we will review the Governor's budget plan to determine any and all impacts on the services provided by our members as well as their wages and benefits. We will provide updates as more information becomes available.