In 1993, during a time of budgetary crisis, the state created a separate and unequal class of worker. Employees with fewer than 10 years of services were hit with an increased penalty for early retirement – 6 percent for each year before age 62 – compared to those with more – 2.25 percent.

Workers felt they had fallen off a “cliff” or had the “rug” pulled from under them; the cartoonish analogies stuck. In this new unfair system, employees are working alongside colleagues with better retirements, for the same job.

A bill before the Legislature now seeks to restore “equity” to those cliff-stricken and rug-burned workers.

LD 1693, “An Act to Restore Equity to the Maine State Retirement System” would retroactively reduce the penalty for retirement before age 62 to 3 percent, rather than six, at a cost, this year alone, of about $90 million.

Supporters say it won’t cost the state a dime, even though state government still owes its pension system $3 billion in unfunded liability from the 1993 “borrowing” which spawned the cliff. The state is constitutionally liable for repaying the amount – in full – by 2028.

Per the legislation, the retirement fund would use higher-than-expected earnings to keep this upfront cost of $90 million off the state books for 2008-2009, and avoid digging the current budget chasm any deeper.

Yet going into the future, the costs are much, much higher: the total cost of restoring these benefits is more than $305 million over the next 20 years, beyond the $3 billion that’s already owed.

This begs a question: in Augusta’s budget desperation, in which vulnerable Mainers are packing hallways pleading for mercy, is this the right time to return hundreds of millions of dollars in benefits to state employees?

Although the current budget is apparently unharmed, the fiscal ramification of returning the benefits is hard to stomach, especially given the brooding forecasts for the impact of retirement costs – especially retiree health care – on Maine’s future spending.

In January, a state accounting projected 11 percent of Maine’s total payroll by 2015 could fund retiree health care benefits alone. It’s now 6.7 percent.

Although Maine, according to a recent study by Pew Charitable Trusts, is paying its retirement obligation, the state’s savings for retiree health care is frighteningly poor. In 2006, Pew found, Maine paid only $73 million of its estimated $177 million liability that year for retiree health care costs.

Instead of using retirement funds to right old wrongs, it’s smarter for Maine to allocate these extra resources for future liabilities, like retiree health care, and not add more millions onto the formidable unfunded liability.

The state cut benefits in a time of crisis. Restoring them in a time of crisis doesn’t make sense. Doing so would send the wrong message to vulnerable Mainers, who are already scared for their futures.

We urge the Legislature to reject LD 1693.