123rd MAINE LEGISLATURE
		LD 1654		LR 881(01)
	An Act To Reduce the Cost of the Unfunded Liability of the State Employee and Teacher Retirement Fund and To Reduce the Cost to Maine Citizens of Purchasing State Bonds
	Fiscal Note for Original Bill
	Sponsor: Rep. Thomas of Ripley
	Committee: Appropriations and Financial Affairs
	Fiscal Note Required: Yes
Fiscal Note
Current biennium cost increase - All Funds Future biennium savings - All Funds
Fiscal Detail and Notes
	This bill directs the Maine Municipal Bond Bank to issue pension cost reduction bonds to pay off part or all of the more than $3,000,000,000 of outstanding unfunded liability the state has to its state employee and teacher retirement plan.  Assuming a 20-year $3 billion issue with level debt service, the annual payments would be just under $250,000,000 per year.  Eliminated, however, would be all payments currently estimated to be required in the Unfunded Actuarial Liability schedule through 2028.  The amounts eliminated in fiscal year 2007-08 and fiscal year 2008-09 would be $199,295,540 and $208,762,079, respectively.  Although these amounts result in net costs in the current biennium, by the year 2013 the amounts saved would begin to exceed the debt service costs of the bonds in ever increasing amounts.  Other alternative bond structures are possible, including one that would attempt to more closely match the existing amortization schedule of the unfunded liability.
	Any additional costs for the Treasurer of State to create and implement a program to make the purchase of state general obligation bonds more accessible and more affordable can be absorbed utilizing existing budgeted resources.