In Spiller v. State, a divided Maine Supreme Judicial Court, sitting as the Law Court, held that certain legislative changes to public employee pension benefits did not impair the employees' constitutional rights because there was no clear indication that the employees had a contractual right to their pensions. These changes were enacted as a reduction of state expenditures in reaction to Maine's fiscal deficit. The majority found that the changes were not unconstitutional and thus were permissible. The dissenting opinion, however, found that a contract existed between the State and the employees and that it had been breached. Although the Spiller decision may have settled that no “contractual rights” result from the formation of public employee pensions in Maine, the disagreement within the Law Court clearly parallels the deep divisions among individual states concerning the nature of the rights that public employees have to their pensions. The United States Supreme Court has not issued a modern standard governing this issue. A review of recent state court decisions shows a variety of approaches among the states in addressing pensioners' rights with no consensus toward a single uniform approach. Given the widespread problem of state fiscal deficits and the corresponding need to reduce state expenditures to shrink such deficits, this issue will surely be revisited frequently in Maine and elsewhere as public employees suffer under the multi-headed ax of fiscal restraint. The question now becomes: do either the majority or dissenting positions in Spiller adequately define the rights of public pensioners? If neither does, then what approach works best for Maine? This Note considers the background of public pensioners' rights within the jurisdictions that have addressed the issue. It contrasts the approaches of different states and examines the limited attention given to public employee pensions by the United States Supreme Court. In particular, this Note examines the alternative approaches noted by the majority and dissent in the Spiller decision.

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