The state Democrats, led by State Senate President John Morse (D-Colorado Springs), are continuing their deeply unserious approach to Colorado’s massive unfunded PERA liability this session. Incoming Speaker of the House Mark Ferrandino (D-Denver) had already indicated as much, first by characterizing those who would seek to deal with the problem as wanting to use the economic situation as an excuse to take away public employee’s pensions, and then by appointing Lois Court (D-Denver) as Chairman of the House Finance Committee.
The latest sign comes with respect to a bill proposed by Republicans Sen. Kent Lambert of Colorado Springs and Rep. Lori Saine, a freshman Republican from Dacono. The bill, SB13-055, would require PERA to use the state’s long-term borrowing interest rate as the discount rate for its liability, and would require that the CAFR be released by May 31 of each year. It would also require that contribution and/or benefit levels for any individual fund be adjusted when the amortization period for that fund climbs beyond 30 years.
All of these are eminently reasonable proposals. For reasons discussed before, the discount rate should be the required rate of return of PERA’s investors, the members. There is also no real reason why PERA can’t produce a CAFR within five months of the end of the calendar year; those dates have been slipping in recent years, but the fact is, the bulk of the CAFR is boilerplate or easily-written text, and the same financial statements and charts each year. And since the stated goal of PERA is to be within a 30-year amortization window, requiring them to be so would simply put teeth into an existing target.
Yet Sen. Morse has chosen to assign the bill not to the Senate Finance Committee, which has jurisdiction over PERA oversight, but to the State, Veterans, and Military Affairs Committee. That committee, often referred to as the “kill committee,” is traditionally staffed with the most partisan members of both parties, and used to kill inconvenient bills. Often that’s because “no” votes on the bills might be embarrassing to the majority, perhaps sufficiently embarrassing that some members wouldn’t be able to resist the temptation to vote for them.
That Senate President Morse has chosen to put this bill in front of the kill committee is practically an admission of its common sense, and his lack of it, but it does make clear the two halves of the Democrats’ full-court defense of their public employee clients’ pension plans.
First, they’ll protect them from any votes they might lose, and also protect the House and Senate Finance Committee members from having to cast “No” votes they’ll later have to explain.
Second, both Ferrandino and Morse have claimed that 2010’s SB1 “solved” the PERA problem for good, though tremendous liabilities remain, even given the plan’s own overly-optimistic assumptions and accounting practices. That will be their explanation for dodging these votes, but even if true, it’s a non sequitur. If PERA is truly fixed, surely members of the committee charged with its oversight would not only be the best-informed of that fact, but also best able to explain it to constituents. Putting the bill in front of a committee whose actual charter has nothing whatsoever to do with PERA, and whose reputation is one of chief enforcer, can’t inspire much confidence that the Democrats will be dealing with the state’s financial problems in good faith in the next two years.
