Instead of squirreling away $107 million, Legislature should fund a new compensation and classification system for state workers

MSEA-SEIU Local 1989 President Mark Brunton testifies in opposition to the administration’s proposal to set aside $107 million of unappropriated state budget surplus funds for undisclosed purposes. He asked the members of the Appropriations Committee to appropriate the funds to close the pay gap and direct the administration to complete their work to fix the compensation and classification system.

Testimony of Mark Brunton
Maine Service Employees Association, SEIU Local 1989

In OPPOSITION to Part G of LD 2214, An Act to Make Supplemental Appropriations and Allocations for the Expenditures of State Government, General Fund and Other Funds and to Change Certain Provisions of the Law Necessary to the Proper Operations of State Government for the Fiscal Years Ending June 30, 2024 and June 30, 2025″ (Emergency) (Governor’s Bill) Sponsored by Representative Melanie Sachs

Before the Joint Standing Committee on Appropriations and Financial Affairs,
2pm Tuesday, February 20, 2024, State House Room 228 and Electronically

Senator Rotundo, Representative Sachs and members of the Committee on Appropriations and Financial Affairs, I’m Mark Brunton, president of the Maine Service Employees Association, Local 1989 of the Service Employees International Union. We are a labor union representing over 13,000 Maine workers, including workers in all three branches of Maine State Government.

We are here today in opposition to Part G of LD 2214 – the proposal to squirrel away $107 million of unappropriated surplus in the General Fund for future needs. Part G is disappointing given that Maine’s rainy-day fund is already maxed out at nearly $1 billion. Part G seems like nothing more than an end-run around the statutory cap on the rainy-day fund.

Part G is especially disappointing given the administration’s repeated failure to adequately staff services that Maine people are counting on. Understaffing is rampant throughout all departments of Maine State Government. With nearly one is six positions vacant – that’s over 2,100 vacant jobs – the State is struggling to hire frontline workers. This is due in large part to the state employee pay gap. The state-commissioned compensation and classification study conducted in 2020 but still not yet acted upon by the administration, despite its statutory and contractual obligations, shows that state workers have been underpaid by 15%, on average, compared to their public and private sector counterparts throughout Maine and New England. In fact, the pay gap is even worse for many state classifications such as civil engineers, accountants, mechanics and correctional workers.

The impacts of understaffing state services are everywhere. Just last week, the Maine Department of Corrections cited the inability to recruit and retain staff in its closure of two small-scale youth facilities that were meant to serve as alternatives to the Long Creek Youth Development Center. Similarly, the Maine Department of Transportation is now hiring private consultants at $85 an hour or more because it cannot hire enough state engineers at the state’s low rate of pay. Maine’s child-protective services remain seriously understaffed and 550 Maine children are waitlisted for special education services they have a right to under Maine law. The State also is struggling to staff 911 dispatch centers, the Maine State Ferry Service and even our beloved Maine state parks. All of these and other public services, along with the workers who provide them, ought to be prioritized over squirreling away $107 million for what the administration calls “future funding needs.”

You should know that in 2023, I urged passage of LD 1854, An Act to Complete and Implement the Comprehensive Review of the Classification and Compensation System for Executive Branch Employees. The bill went under the hammer and was included in the budget legislation passed last July. The enacted budget required the Mills administration to complete the comprehensive review by January 31, 2024, and begin negotiations with workers on the implementation of the recommended changes to the state classification and compensation system.

The current classification and compensation system for state employees was put in place in the late 1970’s. When the system was created, the Legislature also included in state law a requirement for the Bureau of Human Resources to provide active reviews, management and oversight of the entire compensation and classification system every 10 years. Each subsequent administration has failed to do this basic maintenance, and both state workers and Mainers who count on state services are paying the price for their intransigence.

The efforts of MSEA members and workers to correct the Bureau of Human Resources’ dereliction of duty began in 2019. In our negotiations with Governor Mills’ administration, MSEA and Executive Branch workers agreed then to a Memorandum of Understanding to complete a compensation and classification study to support a discussion, grounded in empirical evidence, to determine whether the pay gap still existed, to measure the extent of the gap and to outline the deficiencies in the classifications across all departments. The State contracted with Segal Consulting to conduct the study. The compensation study was designed by a joint labor-management committee and utilized a sampling of “benchmark” positions to determine the average compensation of state government positions.

The compensation portion of the study was completed in 2020. It showed state workers were underpaid 15% on average compared to their public and private sector counterparts throughout Maine and New England. At the time, the administration attempted to block MSEA from releasing the results of the compensation study to our members.

In contract negotiations in 2021, MSEA demanded immediate action to end the pay gap. The administration and DAFS insisted they needed more time to finish the classification portion of the study. MSEA agreed to extend the MOU and assumed there would be good faith to complete the study, then negotiate its implementation.

After a six-month delay in the start of contract negotiations in 2023, we discovered that little progress was made on the classification portion of the study. Then on November 16, 2023, The Legislative Council voted to allow LD 2121, An Act to Address Chronic Understaffing in Maine State Government, sponsored by Representative Drew Gattine, to proceed as emergency legislation. LD 2121, which we support, would:

• Provide $165 million in funding for a new compensation and classification system that closes the state employee pay gap for Executive Branch workers;
• Require the administration to report annually to the Maine Legislature on all Executive Branch job vacancies, so that the Legislature can adequately assess the ongoing staffing crisis;
• Improve laws relating to recruitment and retention adjustments, making it easier to establish recruitment and retention programs targeting agencies experiencing chronic understaffing;
• Require the Maine Department of Administrative and Financial Services and the Bureau of Human Resources to develop a plan to improve the state government hiring process

On February 1, 2024, I received a copy of the Report and Recommendations of the Maine State Government Classification and Compensation Plans Study presented to the Joint Standing Committees on Appropriations and Financial Affairs and State and Local Government on behalf of Department of Administrative and Financial Services (DAFS) Commissioner Figueroa. To say I was disappointed would be a gross understatement. The report is not only incomplete, it is wholly inadequate in terms of meeting the State’s obligations under our negotiated contracts and state law. The report declares “it’s time to set aside the phrase ‘pay gap’” without providing any evidence of progress in terms of competitiveness of state employment with local governments, the federal government, or the private sector. In fact, according to the DAFS’ own data, the report shows that Maine State Government per-job wages grew 19% from 2019 to 2022, whereas the total growth in all sectors in Maine was 23.3%. As such, their data contradicts the report’s purported findings. Other publicly available data shows that average wage growth in Maine has been 30% from 2019 through the first quarter of 2023, according to a quarterly census report on wages – meaning that the pay gap continues to grow.

I have recounted the events of the past five years to emphasize each opportunity the Mills administration and DAFS missed to fix the employment system in Maine State Government and avert the current crises in several departments that directly result from severe staffing shortages. MSEA members and staff have worked tirelessly to convince the administration and DAFS to address the pay gap and related staffing shortages. I’m extremely disappointed to say it appears the Mills administration is not interested in addressing critical staffing shortages and raising state employment up to regional and national pay standards. It is also clear that the Legislature must appropriate the funds to close the pay gap and direct the administration to complete their work to fix the compensation and classification system. As such, instead of squirreling away $107 million for undisclosed purposes, please fund, as proposed in LD 2121, a new compensation and classification system for Executive Branch workers. The need to close the pay gap is real and it must be closed now.

I have attached to my testimony a timeline showing the history of the state employee pay gap as well as an analysis of the pay gap by the Maine Center for Economic Policy.

Thank you and I would be glad to answer any questions.