Bill to add $350 million to Maine’s pension debt moving forward in Legislature

The Maine House of Representatives in session during the 129th Maine Legislature.

AUGUSTA – One of the first of Maine’s major financial problems Governor Paul LePage tackled when he took office was dealing with Maine’s massive unfunded pension debt. Now, with Democrats in control of Maine’s executive and legislative branches, a bill that would add about $350 million to Maine’s current state pension debt, known as the unfunded actuarial liability, is moving through the Maine Legislature.

The bill, which changes Maine’s retirement benefits package to allow for a greater portion of the cost-of-living adjustments Maine workers, teachers and beneficiaries received to count toward their retirement benefits package, would go into effect on July 1, 2020.

The bill allows up to $30,000 in cost-of-living adjustments to be counted toward those workers’ retirement. Current law allows up to $20,000 to be counted.

In 2011, LePage fought for reforms to the system pointing out that the state was looking at a nearly $10 billion unfunded pension debt that threatened to cripple Maine’s budget in the years after his term ended. Those budget years begin now.

Because of reforms passed early in the LePage administration, that crisis was averted with reforms that trimmed more than $3 billion off that unfunded debt.

But the bill to adjust benefits based on the cost-of-living along with several others being considered threaten to restart the accumulation of debt in Maine’s pension system.

Still, supporters of the change, such as a lobbyist for the Maine Education Association, Maine’s teachers union, said the bill would help reverse the “pain” caused by the 2011 reforms.

The bill discussed in this article, L.D. 1534, is sponsored by Rep. John Martin (D – Eagle Lake) and has five cosponsors:

Senate President Troy Jackson (D – Aroostook)
Rep. Michelle Dunphy (D – Old Town)
Rep. Drew Gattine (D – Westbrook)
Rep. Teresa Pierce (D – Falmouth)
Sen. Cathy Breen (D – Cumberland)

You can read the text of the bill by clicking here.

A fiscal note attached to the bill outlines the $350 million addition to Maine’s pension debt. It proposes appropriating $249 million in Maine taxpayer funds in the current budget year to go toward the UAL.

It is unclear if lawmakers will actually appropriate that funding to pay for the retirement, with Gov. Janet Mills’ state budget proposal starting out by proposing to spend virtually every penny the state collects over the next two years.

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