LePage takes heat for no 'shared sacrifice' on pension

AUGUSTA — Gov. Paul LePage's proposed $6.1 billion budget calls for most public employees and teachers to contribute an additional 2 percent into their pensions. The administration has described the proposal as a "shared sacrifice" plan designed to plug the state's budget gap.

But LePage's decision not to contribute more to his own pension benefit has prompted critics to claim the governor has exempted himself from his budget mantra while missing an opportunity to lead by example.

That was the argument advanced by Mike Tipping, a progressive activist, in an opinion piece published in Sunday's Kennebec Journal/Waterville Sentinel. Tipping works for the Maine People's Alliance, a group that has played foil to LePage since the election.

Tipping said the governor's decision not to voluntarily contribute an additional 2 percent to his state pension while asking teachers and state workers to pay more showed that LePage's budget was politically tone deaf.

"He said he wants the spirit of shared sacrifice and yet he's exempting himself," Tipping said.

Tipping acknowledged that the governor's 2 percent additional contribution would make a small dent in the $6.1 billion spending plan. However, he said it would constitute a symbolic gesture for the public employees and teachers who will see a $2.1 billion reduction in benefits and who have already lost $150 million in wages and benefits in previous budgets.

"It's obviously not a big part of the budget, but it's a microcosm of the rest of his budget, which is unfair to teachers, state employees, the poor and homeowners," Tipping said.

Dan Demeritt, LePage's spokesman, said he wasn't aware if upping the governor's contribution was part of the administration's budget deliberations. He said LePage's proposal focused on big-ticket items that would plug the state's budget gap.

"We don’t spend a lot of time trying to find those little angles, as may be evident by what you see here and what you write about," Demeritt said. "We try to solve problems. We don’t spend a lot of time trying to cover a political angle."

Demeritt also noted the governor's $70,000 annual salary is the lowest among all states' chief executives. According to a 2009 analysis by the Council of State Governments, the average governor's salary is $131,000.

Some governors have waived their compensation.

The Legislature hasn't raised the governor's salary since 1987.

LePage has previously said he took a two-thirds pay cut to become governor of Maine. He was previously the general manager for Marden's Surplus & Salvage. 

According to statue, the governor contributes 7.65 percent of his salary to the Governor's Retirement Fund. After he leaves office his pension will pay him three-eights of his annual salary, about $26,000 per year.

The governor is also immediately vested in the system. By contrast, the average public employee or teacher would have to work more than 20 years to receive the same pension.

LePage's budget proposes that all public employees, including so-called confidential employees that include his senior staff, pay an additional 2 percent into the pension system.

Regular employees now pay 7.65 percent of their pay into the pension fund and the state adds another 5.5 percent. Under LePage’s proposal, the 7.65 percent would go up to 9.65 percent, while the state's share would also decrease.

The administration says the plan would immediately save $2.1 billion from the $4.4 billion pension debt.

LePage's supporters have said Tipping's criticism is off the mark, citing a provision in the Maine Constitution that prohibits him from changing his compensation while in office.

However, the administration hasn't deployed the constitutional defense, perhaps because previous governors have reportedly sought separate statutory changes to their compensation to match their budget messaging.

In LePage's proposal, the governor isn't the only public employee exempted from the pension contribution hike. According to Demeritt, both the legislative and judicial branch will make the same contributions to their retirement plans as they are currently.

(This story has been updated to show that the state's contribution to pensions would decrease in LePage's proposed budget)

smistler@sunjournal.com

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Comments

Naran Row-Spaulding's picture

Which "previous governors"?

Steve Mistler wrote:
"However, the administration hasn't deployed the constitutional defense, perhaps because previous governors have reportedly sought separate statutory changes to their compensation to match their budget messaging."

************

"Reportedly"? Which governors, and what statutory changes? This is empty speculation, without a factual basis.

As for Tipping's article, it's a smear piece, which falsely accuses Gov. LePage of "exempting" himself from pension contribution increases being proposed for some other state employees. LePage couldn't change his contribution, according to the Maine State Constitution (see below). Even if a Constitutional amendment to change his compensation were enacted, the effect wouldn't begin until after Gov. LePage was out of office.

Tipping failed to do his homework, and the SJ does themselves no favors by carrying water for such a muddy source.

[u]Here's the Constitutional statute on Executive Compensation[/u]:

Section 6. Compensation. The Governor shall, at stated times, receive for services a compensation, which shall not be increased or diminished during the Governor's continuance in office.
http://www.maine.gov/legis/const/

The statute that sets the Governor's compensation specifically states how the pension amount will be calculated and what amount the Governor will contribute. The contribution from the Governor is not the result of a general law applicable to all state employees or even a class of employees -- it is specific to the Governor. A change in that statute to increase the required contribution from the Governor would reduce the value of the pension benefit and equal diminishing the Governor's compensation as prohibited by the Constitution.

[u]In order to amend the Constitution, here's the procedure[/u]:

Section 4. Amendments to Constitution. The Legislature, whenever 2/3 of both Houses shall deem it necessary, may propose amendments to this Constitution; and when any amendments shall be so agreed upon, a resolution shall be passed and sent to the selectmen of the several towns, and the assessors of the several plantations, empowering and directing them to notify the inhabitants of their respective towns and plantations, in the manner prescribed by law, at the next biennial meetings in the month of November, or to meet in the manner prescribed by law for calling and holding biennial meetings of said inhabitants for the election of Senators and Representatives, on the Tuesday following the first Monday of November following the passage of said resolve, to give in their votes on the question, whether such amendment shall be made; and if it shall appear that a majority of the inhabitants voting on the question are in favor of such amendment, it shall become a part of this Constitution.
http://www.maine.gov/legis/const/

If folks want to argue with Gov. LePage on administrative/legislative issues of substance, have at it. However, this kind of puerile mudslinging is counter-productive - for everyone.

Steve Mistler's picture
staff

McKernan

Associated Press, March 1, 1990
AUGUSTA, Maine - Gov. John R. McKernan, saying he plans to "work some days without pay," is urging state employees to give "serious consideration" to a set of voluntary work force reduction programs aimed at saving $15 million.
[Willis Lyford] said McKernan planned to return to the General Fund one week's worth of his $70,000 annual salary -- $1,346 -- sometime after the beginning of the new fiscal year, which starts July 1.
"Personally, I plan to work some days without pay and hope that you will give serious consideration to participating in one of the voluntary programs," McKernan wrote.

If you have a library card, you can check the source for yourself.

As for Article V, none of the attorneys I spoke with were willing to say definitively that it would prevent the governor from voluntarily increasing his pension contribution. However, Marshall Tinkle, a Portland attorney that is publishing a book on the Maine Constitution, today told Political Correction the following:

"Noting that the relevant section of the Constitution "has never been construed by the court," Tinkle nonetheless said that since "all Section 6 says is [the governor's] compensation 'shall not be increased or diminished'" during the governor's term, a change to LePage's pension payments that doesn't modify the overall size of his compensation package "might not run afoul of the Constitution." Tinkle added that "you could argue that the governor could waive that protection if he wants to and nobody'd be harmed by that."

Political Correction, it should be noted, is run by the progressive group Media Matters.

Naran Row-Spaulding's picture

Library cards, indeed - are you a reporter, or not?

Steve Mistler wrote:
"If you have a library card, you can check the source for yourself."

************
Mr. Mistler - I'm sorry, but that isn't acceptable from a journalist. When you write a piece, you need to include sources and evidence for the statements you include. Yes, it would require homework on your part, instead of just writing, "Reportedly, such and such happened back in 1990."

However, that's the difference between a paid byline, and an anonymous appearance on "Democratic Underground."

Thank you.

RONALD RIML's picture

So your point is that the cost of no benefit to the governor

by virtue of his office may be raised while he is in office.

They can't raise the price of coffee to him in any state canteen? Wow!!! Price of a candy bar? Really.....

Got the Court Case on that one???

 's picture

It never ceases to amaze me

It never ceases to amaze me the lengths the radical right will go to justify their greed and blatant discrimination. Your attempt to manipulate the State Constitution to allow lepage to exempt himself from his own proposal has failed miserably. Have a good meeting.

Naran Row-Spaulding's picture

Please explain the substance

Please explain the substance of your comment. In what manner do you see this as "manipulating" the Maine Constitution?

It's right there, in black and white. "..compensation shall not be increased or diminished."

You may not care for the letter of the law, but that doesn't change its meaning.

Naran Row-Spaulding's picture

Pattie - I'm not certain what

Pattie - I'm not certain what portion of Robert Reed's post you're admonishing, but I hope to see the same for some others on this page.

Thank you.

RONALD RIML's picture

Here's what the Guv's Budget says about Pension Problem

Governor LePage’s Proposed Biennial Budget for 2012-2013


Unfunded Liabilities Reform

http://www.maine.gov/budget/budgetinfo/2012-2013/Unfunded%20Liabilities%...

This massive debt was caused by underfunding in the 1990s and experience changes as well as exacerbated by recent downturns in the stock market.

So the Governor has two choices. It is NOT unconstitutional for him to request legislation to increase his pension contribution to offset the 'recent downturns in the stock market.' By doing so he may be seen as a 'Leader'

Or he may refrain from doing so, and merely be seen as a Fat Cat 'Boss'

 's picture

!!!!!

It's really quite simple, lepage's 'compensation' would be unaffected by a decision to include himself in the additional contribution to the retirement system, especially considering he's not going to contribute anything near the amount others have to contribute to obtain the same pension. You attempted a smokescreen to justify his greed. Typical of you right wing wackos, do any of you have a conscience? Think not!!!!

Kevin Saisi's picture

Budget

The key to improving our state/national financial problem is not to take more money away from working people. A 2% decrease in revenue for a working person causes a ripple effect throughout the economy. It causes them to cut back on spending in their communities, which causes local businesses to have to cut back on employee hours; which, in turn causes them to cut back on spending. If you want the economy to grow, you need to not try to balance the budget on the workers.

If the Republicans would stop excluding the wealthy from paying taxes, our government would have the revenue it needs to operate. I agree that waste has to be cut from government budgets, but those choices need to be made when the economy is good, not when it is bad. The Republicans manufactured this economic down-turn as an excuse to make cuts. They felt that the only way to garner support for their actions was by creating crisis. They either didn't think it through, or didn't care. While the working class is struggling to remain in their homes, the wealthy are getting wealthier. Before we know it, we will be back to the middle ages, with indentured servants and feudal lords.

People, do not be fooled by the Republicans. They are going for total power of the wealthy at the expense of the middle class.

Mike Tipping's picture

Governor LePage's move

The governor's chief financial advisor has said he will ask LePage if he's willing to increase his own contribution: http://www.mpbn.net/Home/tabid/36/ctl/ViewItem/mid/3478/ItemId/15602/Def...

It will be interesting to see what his answer is.

Naran Row-Spaulding's picture

Dear Mr. Tipping - Next time

Dear Mr. Tipping -

Next time you fling scurrilous accusations at Gov. LePage, kindly do us all a favor, and examine the facts before pushing the "send" button.
Thank you.

Substance, Not Scandal.

Naran Row-Spaulding

RONALD RIML's picture

What is 'Scurrilous' about these accusations, Ms Row-Spaulding?

Care to enlighten us?

Naran Row-Spaulding's picture

What I call "scurrilous" is

What I call "scurrilous" is Tipping's accusation that Gov. LePage knowingly "exempted himself" from an increased pension contribution.

Please see Tipping's original articles, published in the Kennebec Journal, the Morning Sentinel, and the Bangor Daily News.

***********

March 13
MIKE TIPPING: LePage exempts own pension from budget cutbacks
http://www.kjonline.com/opinion/lepage-exempts-own-pension-from-budget-c...

***********

He's since posted a disclaimer on his "Tipping Point" blog about the Constitutional statute concerning Executive Compensation, following emails to him containing the information. However, in reading the original, it's clear he didn't do his homework before publishing the piece. Instead, he launched a false, inflammatory smear piece, in an attempt to discredit Gov. LePage.

I call that scurrilous.

RONALD RIML's picture

He did exempt himself... That's his budget...

Are you going to tell me that budget is Eliot Cutler's or Elizabeth Mitchell's????

He can "Man Up" and include himself at any time......

Naran Row-Spaulding's picture

No, he can't - not in the

No, he can't - not in the manner you describe. Read the Constitutional statute, above.

Why do you insist on repeating falsehoods?

 's picture

Come on, Naran, stop being

Come on, Naran, stop being silly. lepage's 'compensation' would not change if he included himself in the increase pension contribution. If the rest of the lepage plan goes through, wealthy people like lepage will have a gigantic tax reduction, so will that mean lepage would not be able to benefit from it since it would increase his 'compensation'? Of course not.

Doreen Sheive's picture

Oh my goodness

Demeritt is good at spinning the spin, however, he didn't do such a great job this time. If LePage were to contribute more to his retirement plan, it would not be changing his salary. It would simply mean that he would take less money home. Plus, I don't know how this reduces the pension debt when the state's contribution will be reduced by 2%. Also, the Legislature and Judicial should not be exempt from this increase, even though as I understand it they are part of another division of the retirement system. I am, actually, not sure if the Legislature pays anything toward their retirement.

Naran Row-Spaulding's picture

Hi, Doreen -- if you read the

Hi, Doreen -- if you read the information I posted, above, you'll see that the issue is not as simple as the SJ and others have alleged.

Gov. LePage's compensation is set by the Maine Constitution, and those statutes have been in place for years. The position of Governor is treated differently under the Constitution than that of other state employees.

The reason for that difference is so that the legislature can't force out a governor by cutting his compensation.

Thanks.

RONALD RIML's picture

Maine Constitution

Article V. -- Part First. - Executive Power.

"Section 6. Compensation. The Governor shall, at stated times, receive for services a compensation, which shall not be increased or diminished during the Governor's continuance in office.

Nothing there which even hints the Govenor's contribution toward his pension cannot be increased.

Naran Row-Spaulding's picture

And, he may do just that.

And, he may do just that. However, it won't be addressed through legislation, since the Constitution mandates that any changes would take place AFTER he's out of office.

However, for Tipping and others to say that he "exempted himself" is plainly false. It's an attempt to smear him - period.

Like I wrote above, "Substance - not Scandal."

RONALD RIML's picture

You want Substance???

The man's a self-admitted thief since the age of twelve. He obviously considers his self-interests above all.

RONALD RIML's picture

Not compensation.......

He would be paying to make up what he, himself, describes as follows in his won budget:

http://www.maine.gov/budget/budgetinfo/2012-2013/Unfunded%20Liabilities%...

"This massive debt was caused by underfunding in the 1990s and experience changes as well as exacerbated by recent downturns in the stock market."

He says it's a stock market problem. He has to make up the difference for that. It's not a cut in 'compensation,' but rather an increase of cost for a benefit.

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