Colorado House begins debate on fix to public employees’ pension
Author: Joey Bunch - April 26, 2018 - Updated: May 10, 2018
With two weeks left in the session, the Colorado House finally brought one of the most significant pieces of legislation this year to floor Wednesday: safeguarding public employees’ pension plan and, ultimately, the credit rating for local and state government.
After an hour, the bill was postponed until Monday. Tick tock. Tick tock. The clock is starting to tick on the end of he session on May 9.
If the bill passes a voice vote on Monday, it will still need a recorded vote in the House, on Tuesday.
Since it’s been heavily amended, if it passes the Democratic majority in the House, it would go to a conference committee from the Senate, where Republicans hold the majority.
That would leave a week before the General Assembly adjourns on May 9. That’s certainly doable, given the pensions of state and local employees, more than half of whom are teachers or school employees.
But the swings in the amendments every step of the way suggests a dogfight with huge stakes before lawmakers go out to campaign for re-election this summer.
The pension plan is expected to be at least $32 billion short of what it needs to cover benefits, and the plan before the legislature would seek to bring that in balance within the next three decades.
At risk is whether the plan would collapse in a future downturn, but sooner than that, it could hurt the state’s credit rating which would force government to pay more in interest whenever it borrows money, which is often.
Wednesday House Republicans tried and failed to pass some pretty big amendments to Senate Bill 200 to have employees put in more from their paychecks and to ensure equal representation from both parties on an oversight board.
The pension plan has 586,634 state and local public employees, about 60 percent of whom are teachers or other school employees. Teachers are expected to rally at the Capitol over the retirement proposal and other school funding on Thursday and Friday, part of a statewide campaign.
Rep. Susan Beckman, R-Littleton, challenged an amendment added by Democrats in a committee to elevate Department of Corrections employees’ benefits and early-retirement schedule equal to that of state troopers and Bureau of Investigation officers.
She said the state shouldn’t increase benefits for some while they’re cutting them for teachers and others in the plan. The amendment added last week has not yet gotten a “fiscal note” to show how much it would cost the system.
Beckman asked lawmakers to explain that reasoning to the teachers who are expected to rally at the Capitol.
The bill was then laid over to Monday by the Democrats, before a vote on Beckman’s amendment.
Democrats have pushed to have the state put in $225 million each year directly from the state budget, which is about $29 billion this year, but Republicans tried and failed to make that a one-time investment then raise the contribution of workers, in steps, to 3 percent. That would be a more reliable source of funding, once that Senate Republicans would be more likely to support.
Rep. Kevin Van Winkle, R-Highlands Ranch, said there’s nothing in the bill to assure future legislatures will put in at least $225 million annually. The pension would compete for dollars with schools, roads and other needs, especially when money is tight.
“The minute a recession hits, that guaranteed $225 million is the first thing that will be taken out,” he said. “Then we will again put our credit rating at risk and put those promises made (to retirees) at risk.”
Rep. Dan Pabon, D-Denver, who is a co-sponsor of the bill, said workers and retirees already are on the front line to pay in more because of a trigger included in the bill to bring the pension back into line if it’s underfunded in the future.
“Shared sacrifice often times has been disproportionately placed on our workers,” he said. “If we want to give any recognition to the hard work and dedication that many of our employees have given us through their years of service what we need to do is what we’re doing here.”
The Republican-led upper chamber passed the bill on March 27, and it underwent several amendments from the Democratic majority on the House Finance Committee on April 16.
The House committee also removed an option for future workers to use a private 401(k)-style retirement plan, instead of being locked into the pension.
The House and Senate versions include cutting annual cost-of-living increases from 2 percent to 1.25 percent.