Colorado lawmakers begin a mad dash to the finish next week with more than a dozen significant bills in limbo and the session’s clock set to expire.
The final flurry before the May 6 adjournment is typical each session, but this year it is complicated by a divided legislature seeking elusive common ground on a wide range of issues and a series of late bills with huge implications.
The new bills include a repeal of the sales tax on soft drinks, a new$3.5 billion transportation bonds package, two resolutions to cut the length of the legislative session, an opt-out for mail ballots, the renewal of a state consumer watchdog and a ballot measure on how to spend $58 million of marijuana taxes.
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UPDATED: 12/01/2012 12:08:53 AM MST
The Colorado Public Employees’ Retirement Association is one of 21 state pension funds that are not “fiscally sound,” according to a national investment research firm.
The report, from Morningstar Inc., found that 21 states’ aggregate funded ratios were below 70 percent, the threshold which Morningstar considers a system to be “fiscally sound.” The funded ratio was determined by dividing a pension plan’s assets by its liabilities.
PERA has $26 billion in unfunded liabilities. Lawmakers in 2010 passed a bipartisan piece of legislation that raised retirement ages for government workers, reduced annual cost-of-living adjustments and required increased contributions from government employers and their workers.
The Morningstar study said Colorado’s PERA funded ratio for its state division was 57.7 percent, the number it based its “not fiscally sound” determination on. However, some of PERA’s individual divisions were better off. The Denver Public Schools fund, for example, was funded at 81.5 percent, while the local and judicial divisions were each at 69.3 percent. Continue reading
May 03, 2012 7:31 PM
This legislative session Colorado HB1250 was introduced to begin addressing an unfunded billion-dollar liability in the Public Employee Retirement Association’s (PERA) retiree health care benefit program. Its own sponsor then killed the bill after it came under a fire storm of hysteria-tinged and false criticisms, fueled by one-sided media coverage.
Colorado taxpayers lost an important opportunity for the Legislature to begin the fundamental reforms required to put PERA on a sustainable fiscal path. Instead PERA will continue to carry huge unfunded liabilities that in the absence of reform will eventually require a taxpayer bailout or PERA retirees being denied their promised benefits.
About a dozen years ago, PERA established a health care program for people who retire before age 65 and no longer are covered by their government employer for health insurance. Local governments, school districts and state government contribute annually. The program is a type of “defined benefit.” In other words, a promise with no cap to the cost.
The PERA health benefit also gives retirees a direct premium subsidy even after they turn 65 and begin using the taxpayer-supplied Medicare.
HB 1250 would have changed the program from an open-ended promise to pay retirees whatever it takes, to a $230 fixed subsidy — the amount they receive today. Additionally, eligibility for PERA’s retiree health insurance would have been restricted to those 65 years of age and under, and thus not eligible for Medicare or Medicaid. Continue reading