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Dan NjegomirDan NjegomirOctober 13, 20179min1518

Anyone recall the ’60s war spoof, “Situation Hopeless…But Not Serious”? To the various critics of the Colorado Public Employees’ Retirement Association, or PERA, the movie’s title must seem apt: They’d argue the system faces a looming crisis that nobody at PERA itself seems particularly worried about.

The concern is often raised by the political right — Republican Treasurer and gubernatorial hopeful Walker Stapleton has made it a veritable crusade — and they point to teetering state pension systems around the country as writing on the wall.

This week, one of the right’s most prominent players, Americans for Prosperity-Colorado, debuted a new education campaign to alert the public to what AFP says are PERA’s impending perils for taxpayers. Sweeping, structural changes are needed, AFP maintains, and as the group makes clear in a key campaign catchphrase — “PERA is a disaster in the making” — reform can’t come too soon. From the campaign’s new website:

Colorado’s public pension system is in serious trouble. The Public Employees’ Retirement Association (PERA) is underfunded by tens of billions of dollars and getting worse every day. Unless Colorado takes steps to fix the problem, retirees will see their pension promises broken, and taxpayers could be forced to pick up the tab for spiraling pension costs. At the same time tax dollars would likely be diverted away from classrooms, infrastructure, and public safety to pay for pensions.

PERA’s “defined benefit” system, funded by payroll deductions from state employees and public schoolteachers, guarantees retirees a fixed monthly payment based on how much they were paid during their working years. Kind of like the federal government’s Social Security system. How did PERA get in such a jam? AFP contends:

While defined benefit plans are generally more expensive, states could choose to fund them fully by guaranteeing the full actually required contribution (ARC) payments each and every year.

Unfortunately, politicians would rather spend that money on projects today, often leaving pensions woefully underfunded.

To make matters worse, Colorado’s legislature passed a law that has allowed them to chronically underfund PERA for over a decade.  This has caused PERA’s unfunded liabilities and costs to taxpayers to both skyrocket.

And there’s this dire warning:

To make ends meet, states will have to raise taxes, while cutting funding for core functions of government such as schools, public safety and infrastructure.

What’s to be done? Though the website doesn’t spell it out in so many words, AFP seems to prefer a 401K-style “defined contribution” plan, common to the private sector. The payout to retirees could be great or not, depending on how the fund is invested over time as well as on how financial markets are performing overall. AFP lays it out like this:

Colorado implemented some minor reforms in 2010, but PERA is still headed toward disaster. Colorado needs to change its out-of-date retirement system and move to a model that is seen in the private sector. This will not only give employees portability and flexibility in their retirement, but also lessen the burden on taxpayers.

The advocacy group also urges site visitors to sign a petition urging lawmakers “to update Colorado’s pension system and give public employees more control over their own retirement while protecting taxpayers and current retirees.”

OK. What does PERA say? We asked system spokeswoman Katie Kaufmanis, who responded thusly:

The assertion that Colorado’s retirement system can be reformed by simply changing it from a hybrid defined benefit plan to a defined contribution (401(k)-type) plan ignores the following facts:

In July 2015, the Colorado General Assembly’s Legislative Audit Committee released a report determining that the cost to fund PERA benefits is lower than the cost of other plans in the public and private sector. Independent actuarial firm Gabriel, Roeder, Smith & Company (GRS), with oversight from the Office of the State Auditor, examined the plan design of Colorado PERA and released the report. The report also found that when costs are held constant, PERA’s Hybrid Defined Benefit Plan delivers the highest percentage of salary replacement income in retirement – for short-term as well as career public employees in Colorado.

National research finds that public sector employees with retirement plan choice overwhelming choose defined benefit (DB) pension plans over 401(k)-type defined contribution (DC) individual accounts.

States that have switched to defined contribution plans for their public employees have experienced higher costs. (Alaska, Michigan, West Virginia case studies here.)

The PERA Board of Trustees has worked to develop a legislative recommendation for the Colorado General Assembly that reduces the time it will take PERA to become fully funded. This package includes benefit reductions and contribution increases and is projected to return PERA to full funding in 30 years.

This is of course an old debate that isn’t going away anytime soon. Thanks to AFP for the brush-up on the issue, and thanks to Kaufmanis for weighing in, as well.


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Ernest LuningErnest LuningOctober 3, 20178min1121

It's safe to say no one is happy with the special legislative session that convened Monday and concluded Tuesday at the Colorado Capitol.  Gov. John Hickenlooper has faced nearly unified opposition from Republican lawmakers since calling the special session in order to come up with a "simple fix" to a drafting error in complicated legislation he signed earlier this year.


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Ernest LuningErnest LuningSeptember 29, 20178min1229

Gov. John Hickenlooper and Democratic lawmakers say it’s a simple fix, but Republicans say it’s anything but. As next week’s special legislative session approaches — it’s set to convene Monday — Republican leaders in the Capitol and outside pressure groups are ramping up their opposition and predict the endeavor will be an expensive waste of time. It isn’t the reaction Hickenlooper expected when he issued a formal call for the session earlier in September so lawmakers could correct a drafting error in a tax bill that’s costing some special districts hundreds of thousands of dollars in revenue.


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Dan NjegomirDan NjegomirSeptember 13, 20176min3340

Promising “a well-rounded six-figure campaign,” pro-education reform behemoth Americans for Prosperity-Colorado announced it is launching a sweeping outreach effort to parents in the Douglas County School District, the state’s third-largest school system, to warn them “educational opportunity is in jeopardy.” The digital and direct-mail campaign, touted in a press release from the group this week, directs parents to sign an online petition calling on the Douglas County School Board “to preserve educational freedom.”

The pitch appears intended to rebuild support for the district’s dormant school-voucher program — which would help parents pay tuition at parochial and private schools of their choosing — though there’s no explicit mention of the program itself in the group’s announcement. A reform-minded DougCo school board, elected in 2009, adopted the much-debated policy but was never able to implement it in the face of a court challenge.

AFP’s campaign is launching on the heels of two major developments — renewed action in the long-idled court case, which halted the program in 2015, and the approach of the November school board election, which could shift the DougCo board away from its current, pro-reform tilt. Both developments could determine whether the voucher program ever takes effect. Meaning, the stakes are high, as AFP-Colorado must have noticed; by the way, it recently mounted a broader, statewide campaign advocating for school choice.

The U.S. Supreme Court in June ordered Colorado’s Supreme Court to reconsider its ruling two years ago striking down the program. The state’s highest court had ruled at the time that Colorado’s constitution included, “broad, unequivocal language forbidding the State from using public money to fund religious schools.” However, the new ruling by the nation’s top court, following its decision on a related case, sets the stage for a do-over ruling by the state Supreme Court that could reopen the door to vouchers in DougCo.

Meanwhile, the school board is sharply divided, 4-3, between pro- and anti-voucher factions. The upcoming races promise a rematch between the two sides albeit with largely new slates of candidates. If the current majority loses just one seat, the new board could pull the plug on the program and moot any action by the state Supreme Court.

So AFP-Colorado’s new campaign comes at a critical juncture (though of course it makes no reference to the races).

The four-candidate, pro-voucher slate, which bills itself as “Elevate Douglas County,” will face off with the anti-voucher, four-candidate “Dream Team.” Voters can expect a lot of campaign money to pour in on both sides in the coming showdown, as has been the case in past elections; there are no contribution limits for school board candidates.

Prominent, well-heeled school-choice advocates like Alex Cranberg, Ed McVaney and Ralph Nagel have funded previous pro-voucher slates and probably will be back at bat for Elevate Douglas County. The state’s teacher unions — adamant foes of vouchers as well as charter schools and backers of the ongoing court challenge — likely will step up to the plate for the Dream Team.

As for AFP-Colorado’s campaign, State Director Jesse Mallory had this to say in this week’s press announcement:

“We should be doing everything possible to ensure that families have the ability to select the best educational options for their children. Kids enrolled in educational opportunity programs have shown increased graduation rates, are more likely to enroll in college, and ultimately are better prepared for the jobs of the future. We’re calling on parents to sign our petition calling on the Douglas County School Board to ensure that a child’s future shouldn’t be decided by their zip code or family income.”


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Dan NjegomirDan NjegomirSeptember 8, 20175min786

 

Remember that high school teacher or college prof who was known as “an easy A”? The one you didn’t have to worry about too much around finals?

No such luck for the 100 members of Colorado’s General Assembly — at least, not when it comes to the report card just issued on the lawmakers for the 2017 session by tax-hating, spending-cutting, government-curbing conservative advocacy behemoth Americans for Prosperity-Colorado.

Only six lawmakers — all of them in the state Senate, all of them members of the GOP majority — earned an A grade. The six “Champions of Freedom,” as AFP dubs them, are Sens. John Cooke, of Greeley; Vicki Marble, of Fort Collins; Tim Neville, of Littleton; Jim Smallwood, of Parker; Jerry Sonnenberg, of Sterling, and Jack Tate of Centennial.

In stark contrast, 17 state senators — basically, all of the upper chamber’s Democrats — flunked. That’s right: a big, fat F.

Things look even worse in the House. All 37 of the lower chamber’s majority Democrats — plus three Republicans:  Reps. Marc Catlin, of Montrose; Polly Lawrence  (currently running for state treasurer), of Roxborough Park, and Lang Sias, of Arvada — rated an F.

And AFP handed out no A’s to House members. Not a one.

The grand total: six A’s and 57 F’s.

Of interest: Sonnenberg and Tate were among the Republicans to vote for Senate Bill 267, the “rural sustainability” measure that raised revenue for a number of budget items while raising the ire of the political right.

Also noteworthy was who didn’t make the Senate’s A-list: longtime fiscal conservative stalwarts like Sen. Kent Lambert, of Colorado Springs, who earned a B, and Sen. Kevin Lundberg, of Berthoud, who came home with a C.

Some of the House’s reputed righties also didn’t seem to impress AFP. Rep. Perry Buck, of Windsor — whose significant other is swamp-draining 4th Congressional District Republican U.S. Rep. Ken Buck — got a D. Rep. Justin Everett, of Littleton — another candidate for state treasurer whose Wikipedia page says he “has been described as a ‘Combative Conservative,’ and is one of the most constitutionally conservative members of the Colorado House” — got a C. Rep. Tim Leonard, the Evergreen Republican? Also a C. Rep. Dave Williams, of Colorado Springs: C. Even House Republican Minority Leader Patrick Neville, of Castle Rock, only got a B.

What’s the basis for the grades? The organization issued a press release accompanying the report card today, offering insights on methodology:

In an effort to provide the most comprehensive accountability tool to citizens, AFP-Colorado scored nearly 1,800 individual votes on a wide variety of legislation. Bills scored include those that relate to our Budget Colorado Public Policy Agenda: SB 267, the “Sustainability of Rural Colorado” bill, HB 1242, a sales tax increase for transportation funding, and SB 61, a bill that sought to equalize funding for charter schools from local property taxes.

AFP-Colorado State Director Jesse Mallory — who not long ago worked closely with the Senate Republicans as their chief of staff — was quoted in today’s press release:

“We are excited to release this year’s scorecard, a tool we use to hold members accountable and commend those who advance economic freedom … We plan to promote this scorecard throughout the state to inform Coloradans on how their legislators voted. …”

In other words, he thinks the F students might have some ‘splainin’ to do.

Depending, of course, on how much their constituents care.