The Colorado Springs Gazette: State pension continues treading water
Author: The Colorado Springs Gazette Editorial Board - May 12, 2018 - Updated: May 12, 2018
After sunset of the legislative session, Colorado remains adrift in a sea of pension debt.
Fewer than 50 minutes before the 2018 session’s mandatory close Wednesday, legislators compromised on the latest rescue attempt of the Public Employees Retirement Association. By one account, unfunded liabilities deluge the plan by $32 billion. Another has the problem at $51 billion.
The compromise disappoints both parties as a measure that offers no sight of dry land.
“This is not a victory. This is treading water, barely,” said Rep. Lori Saine, R-Firestone, as quoted by Colorado Politics reporter Joey Bunch.
Saine said the bill only keeps tragedy at bay until the torrent of another recession.
House Majority Leader KC Becker, D-Boulder, was no more optimistic.
“No side is happy about the result,” Becker said.
State Treasurer Walker Stapleton, a Republican gubernatorial candidate, serves on the pension board and routinely warns about the fund’s poor buoyancy. He says Wednesday’s rescue effort places too much weight on taxpayers. The bill commits $225 million annually from the general fund.
“That money could and should have been spent elsewhere,” Stapleton told The Gazette.
“Infrastructure and education, for starters. While I appreciate that the Legislature has at long last heeded my call, I am concerned that this amounts to yet another incremental fix on the back of Colorado’s taxpayers. Until we gain the will to structurally fix this system properly for the long term, taxpayers will keep being asked for more money to bail out PERA and we will continue making promises to Colorado’s 600,000 public workers that we can’t fulfill.”
The transportation bill devotes only $50 million of general fund cash to highways, bridges and roads — $175 million less than taxpayers will spend reinflating public-sector retirement rafts.
Gov. John Hickenlooper lobbied for the bill Wednesday at a Democratic caucus meeting, despite its hefty toll on the general fund. Saying taxpayers had contributed enough to public-sector retirements, the governor’s budget proposal in November put no additional pension burden on general funds. Stapleton, other Republicans, and the editorial boards of The Denver Post and The Gazette applauded him.
The pension’s discouraging coordinates undermine dreams of a miraculous rescue.
The bill, which Hickenlooper will undoubtedly sign, increases employee contributions by 2 percent. It reduces the annual 2 percent cost-of-living increase for retirees, deflating it to 1.5 percent. It raises the age for retirement with full benefits from 58 to 64.
Democrats conceded to Republicans an opt-out provision for future public employees, excluding school teachers. Qualifying public workers will have the option to abandon ship on traditional state pension contributions and benefits in favor of defined contribution plans, similar to private-sector 401(k) accounts.
We remain immersed in pension peril, dreading the tides of an economic storm. Legislators and the governor had no easy options, but at least they bought more time.