The committee endorsed a 5 percent pay cut for all state employees – including legislators – and grappled with competing proposals for how much employees should pay for their health insurance. By the time they adjourned at about 2 a.m. today, the committee had passed then repealed a plan to link employees’ health to how much they pay for health insurance.
These issues are among a dwindling list of decisions that have to be made on the budget for the next two years before the entire package goes to the full Legislature for approval. Much of the negotiations and formulation of new ideas happened behind closed doors as Legislators sought compromises that would allow bipartisan budget support.
The two parties were split on the health insurance issue. They both endorsed a tiered system that would tie how much employees pay in insurance premiums to how much they earn per year.
The lowest-paid employees would pay 5 percent under both proposals and those making more than $90,000 a year would pay as much as 10 or 15 percent by the end of the biennium.
The state currently funds 100 percent of employees’ premiums. Governor John Baldacci, in a package of new money-saving initiatives announced last month, proposed requiring all new state employees to pay for 15 percent of the cost.
The difference between the two plans unveiled Thursday involved a wellness incentive. Democrats proposed reimbursing healthy employees their total health insurance cost, which for some would essentially mean they continue to pay nothing. But Republicans, based on the premise that employees should pay some portion of the cost, agreed with the wellness program but proposed capping reimbursements at half the premium.
“This is a model that has worked well in the private sector,” said Sen. Richard Rosen (R-Bucksport). “It maintains a component where the employer and the employee continue to participate (in paying the premiums). I think it’s a good proposal.”
Rep. John Martin (D-Eagle Lake), who introduced the Democrats’ plan, disagreed.
“Our plan basically calls for the possibility that the employee can go back and collect the entire amount of their premium,” he said. “It keeps the cost of insurance down. I’m convinced this proposal will work better than the other one.”
Rep. Emily Cain (D-Orono) said she was encouraged that creating a wellness program was being discussed at all.
“Two years ago we tried to have this conversation and it went nowhere,” she said. “That is worth noting, that we’ve not been here before with both sides offering a clear plan.”
The committee initially endorsed the Democrats’ plan with a vote split along party lines, but later opted to repeal that decision after lengthy discussions in private.
The committee also grappled with proposals by Baldacci to alter the income tax code so tax brackets in Maine don’t adjust according to the federal inflation rate. He also proposed deviating from the federal system of standard income tax deductions.
In the early morning hours, Grant Pennoyer, director of the Legislature’s Office of Fiscal and Program Review, presented a proposal that would save the state $21.2 million by adjusting how the state’s revenue-sharing dollars to municipalities are calculated and dispersed. The proposal would have no effect on the amount received by municipalities, said Pennoyer.
With that, the committee went into another closed-door session and did not vote on the issue before adjourning for the night. Deliberations were scheduled to continue today.
