AUGUSTA — The battle for public opinion continued Tuesday as the state treasurer urged lawmakers to embrace the governor’s strategy to fix the state pension debt.

In his third news conference on the issue since Jan. 21, Treasurer Bruce Poliquin said lawmakers should “seize the moment” to tackle Maine’s $4.3 billion pension shortfall, which he described as a “fiscal monster.”

But advocates for state workers and teachers accused Poliquin and the governor of overstating the pension problem to scare the public and lawmakers into supporting a proposal that would reduce teacher and state worker retirement benefits while plugging the budget gap and funding $203 million in tax cuts for higher-income Mainers.

Poliquin said the governor’s proposal would save the state $2.1 billion by freezing and capping cost-of-living adjustments, extending the retirement age and requiring state employees to pay an additional 2 percent into the pension system.

He said alternative proposals, such as extending the 2028 funding deadline or bonding the existing debt could be disastrous, creating instability for potential business investors.

“Successful entrepreneurs are fiscally prudent,” Poliquin said. “They’re attracted to states where they don’t have to worry about taxes going up, or services being cut, to pay for long-term, public-sector debt.”

Steve Crouse of the Maine Education Association, the state’s teachers union, said Poliquin was using the treasurer’s office to promote an “extreme change” to the retirement system.

“I think the state treasurer believes that if he does one of these (news conferences) every week, people will actually start believing what he’s saying,” Crouse said.

Crouse and MaryAnne Turowski of the Maine State Employees Association were hopeful that a moderate solution could be found in the Legislature and the Appropriations Committee.

The latter has already heard testimony from state employees and retired teachers protesting LePage’s proposal. Both MEA and MSEA have argued that the 2 percent retirement increase amounts to a payroll tax to fund tax breaks for wealthy Mainers.

Turowski said lawmakers on both sides of the aisle were wary of LePage’s budget.

“There’s certainly not a majority support for this plan,” she said, adding that the administration had “shut the door” on alternatives.

Rep. Emily Cain, D-Orono, the House minority leader, said party leaders hadn’t been negotiating other options because it was too early in the budget process.

Cain and Sen. Justin Alfond, D-Portland, issued a joint release urging Poliquin and the administration to end “scare tactics” about the so-called pension crisis. 

They also called on the administration to declare how it planned to spend the 2 percent reduction in pension benefits.

Poliquin said the savings would be directed to the pension debt. But Turowski said the proposed 2 percent benefit reduction and projected two-year $56 million savings came with no assurances about how the money would be reallocated.

Crouse agreed.

“They could use it for tax cuts or other parts of the budget,” he said. “It’s purely a tax on public employees to pay for other things.”

Meanwhile, Democrats said that the administration was overstating the pension issue. Quoting a recent report from the Maine Public Employment Retirement System, House Democrats said the state retirement system could continue to pay benefits for more than 15 years at the 2010 level without making any additions to the fund.

Administration officials estimate the pension reform proposals will save more than $400 million in the upcoming two-year budget cycle.

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