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Under Mills' budget, retired state workers would see an additional living adjustment payment

State workers rally for higher wages at the Maine State House on Sunday, June 27.
MSEA-SEIU Local 1989
State workers rally for higher wages at the Maine State House on Sunday, June 27.

Some 37,000 retired state employees could get a one-time payment this year to help them shoulder rising costs under the governor's supplemental budget proposal.

Gov. Janet Mills recommended using part of the budget surplus to inject $14.7 million into the Maine Public Employee Retirement System (MainePERS).

The Mills administration said it’s designed to help assure state benefits keep up with rising costs, and more specifically to bridge the gap between the rate of inflation and the cost of living adjustment for retired state employees.

Dean Staffieri, president of the Maine Service Employees Association, said the idea is really just a temporary fix. MSEA/SEIU local 1989 represents several thousand workers in the state's executive branch.

"It doesn't really help retirees catch up with the rising costs of living," he said. "It's a one-time deal, but it doesn't build on people's base, so next year people go right back to where they were."

MainePERS used the Consumer Price Index-Urban Consumers (CPI-U) rate for June 2021 as the basis for setting cost of living adjustments for its pension plans, which was 5.4%.

But under state law, the maximum cost of living adjustment government retirees can receive is 3%, which is applied to the first $22,947 of their benefits.

"Retirees having a hard time making ends meet, because they don't get the full 5.4%," Staffieri said. "Their medications, their heating, their housing, all of that goes up."

Staffieri said the union would like to see the governor make more permanent increases in retired state employee pensions.