State Retirees to see $6000.00 tax increase or 100% loss of health care.

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State Retirees to face $6000.00 tax increase or 100% loss of health care.


Governor LePage said that future retirees can expect to pay a portion of their retirement until they reach 65 and are eligible for Social Security. Governor LePage’s definition of “a portion” is 100%.

This Statement shows duplicity, ignorance, or both. Very few State Employees will qualify for 100% Social Security benefits. Many have never paid in to the system, and those that have most face up to a 2/3 cut in their S.S. due to the Federal tax on State Retiree Social Security benefits called the “Windfall elimination” provision. Simply put, if you get a State pension, they confiscate your S.S. because the Feds wanted to have that money to spend.

If a State Employee has only worked for the State they do not qualify for Medicare and their State promised health care is the only care they can expect when they retire. They may have no S.S. to look forward to. My projected S.S. is about $150.00 a month.

The Governor recently encouraged State employees to "retire now" by putting through a budget that would deny them negotiated health care benefits until 65 years of age, effectively slapping a $6000.00 penalty on their retirement while denying them an annual raise to keep up with inflation. (Commonly referred to by Republicans as a tax)

What happened to the "no new taxes" promise from the Tea-Party backed candidate?

The average pension of a retired employee is $19,000.00 before taxes. If a spouse wants to have a survivor get their pension if they die the pension is reduced by up to 20%, now the pension is $15,200.00.

Under LePage’s plan, if an employee retires before they reach 65 they will pay the full cost of their health care, approximately $6000.00, if they want their spouse covered the cost is about $250.00 a month, more if you have a younger spouse, more again if you are 62 and you might live longer. Then at 65 when the employee ages into the full payment of health care, the Federal need to pick up Medicare part B kicks in, at about $125.00 a month for both of them, a $3000.00 annual cost.

Between 62 and 65, a retiree’s pension could be reduced by $6000.00 not including the cost (100%) of the spousal coverage and if a child under 26 is included in family coverage, cost raises to nearly $5200.00 more. Retirees face a potential cut of up to $6000.00 a year under just the governor’s plan, up to $11,200.00 if they want to cover family. Do the math. A retiree’s pension is reduced to $7,800.00 and all before taxes kick in. This will not encourage State Employees to retire before 65.

This is how Governor LePage plans to deal with the budget. He will send employees out to live on a $7,800.00 pension, deny any adjustments for three years, and then guarantee an inflation adjustment smaller than the average inflation rate for the last 80 years.

To add further insult to injury, under the current system if you retire you must take your health care or lose it forever, so those that are forced to stay in the workforce past 62 must live in fear of losing their jobs for the next three years because if they don't spend the $600.00 a month for themselves and up to $5200.00 for their families they will lose the benefit that they may have worked for, for over 30 years. This is a threat coveted by an administration hostile to labor, a hammer the administration wants to wield over an aging workforce.

Maine is trying to drive employees into a retirement they cannot afford, while the governor has proposed a nearly 10% increase in spending taken directly from employees and retirees.


Blame the employees.


Maine under LePage is not only committing theft, but also trying to ignore the reality that pensioners, are our friends, neighbors, and fellow Mainers who earned their retirement by trusting their State.

The pension obligations are not nearly as overwhelming as they have been painted, with Maine's fund increasing nearly a Billion dollars through shrewd investing in just one year.

Instead of taking real steps to research the problem and find real savings, in a lust for Union blood, the new Governor is trying to blame the victims.


Unions in Maine have not been asked for input. Would they accept changes for new employees in the same way as our sister state of Vermont or that Left wing, all Democratic state California?

In many States through bargaining, State legislatures have utilized the knowledge of their employees to find savings, and employees have negotiated higher monthly pension contributions, retirement incentives, and current savings by such novel ideas as having State agencies bid on jobs against private industry.

Can we find savings in Maine?

We may never know. It is not in the nature of this ex CEO's to seek any opinion but his own.

It appears he believes he can send a memo to both the employees and the legislature to do as he says.


A CEO may be able to run a company efficiently and make the trains run on time, by giving orders, but a legislature jealously guards its role and rights. As a CEO, the Gov. has had no experience dealing with opinions other than his own. The Maine legislature is a great believer in education.


There has been no dialog with the Unions. There have been no talks with the Republican leadership. It appears that Gov. LePage is trying to govern with no input. He has not sought out employee Unions, has not talked with the legislature that must run for office in two years. This may be the hope for Maine, Maine has a Republican majority but they are one of three co-equal branches of government and the legislature does not take orders from any other branch.


Employees would welcome a conversation with the Gov. but there has been no attempt to involve employees or their Unions. There are numerous possible partial fixes to the pension problem. Some ideas are a temporary increase in pension deductions, a temporary reduction in pension adjustments until the economy improves even more furloughs or voluntary temporary pay cuts. I know employees could suggest far more ideas to reduce the impact of permanent pension cuts or the prospect of having no health care in retirement, while there wages will continue the wage freeze they have been in for years, even taking proposed cuts. These employees have far more motivation to solve the State’s problem with pensions than any other group.


It seems as if Gov. LePage’s goal is to permanently cripple Unions and retirees, while ignoring the budget, and trashing the full faith and trust of the State of Maine.

The Federal court system will clog with lawsuits questioning the legality of reducing pension benefits and breaking contracts that retirees believed they could trust.

Rather than face this expense the State should work with the current employees and retirees to develop a system to protect their security and provide a predictable future.

Current employees will be taking a hit, but the worst impact from refusing to listen to State employees, freezing, annual increases, and lowering them permanently to less than the rate of inflation, is to get revenge on State employees that have voted Democratic while they are older, sicker, and more vulnerable.

The loss of spending from retirees in Maine and the employees fleeing Maine’s income tax on their already taxed pensions will more than offset any savings, all in the name of telling them to “kiss his butt”.

A fact the governor does not acknowledge is that the pension States expected revenue has increased nearly $300,000,000.00 due to increased consumer spending and increasing tax revenues, an increase the governor moved immediately to wipe out by increasing spending over 7.8%.

This is not just a Maine governor’s idea, this is a national trend funded by large corporations intending to make the U.S. the cheap labor source for their new market, China.

Until now, Congress has had little authority over state handling of their pension accounts, but in the Republican Congress the idea of letting States declare bankruptcy on their debts and wipe out all pension obligations has been repeatedly floated. These new laws would leave the employees with no pensions while still repaying 100% of any Wall St. debt.


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