May 19

Worst Public Pension Quarterly Results Reported-Reality Is Far Worse

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Public pensions, including PERA, had their worst investment return quarter ever in 1Q20. State pensions, on average, lost 13.2% in the quarter. However, the losses are worse than reported due to secrecy agreements in place regarding their alternative investments position. These highly speculative investments in the PERA portfolio do not have to be reported now. This reality will exacerbate the financial condition of PERA, and other state pensions, and will motivate states, like Colorado, to scream for taxpayer relief. PERA’s funding ratio declined in the very good times (and stock market boom from 2009 to 2019.) The funding ratio will decline even ffurther in the current economic. The coronavirus economy will show that their financial health is now even more problematic. Colorado taxpayers will be the target to bail these pensions out yet again. Taxpayers already contribute more than 2X to PERA than private sector employers contribute to Social Security. For more, see this Forbes analysis:

 

Worst Public Pension Quarterly Results Reported-Reality Is Far Worse

Edward Siedle Contributor


Public pensions just reported their worst quarterly investment performance in over a decade. Thanks to secrecy agreements, reporting delays and valuation wiggle-room granted to hedge funds, private equity, real estate, infrastructure, venture capital and other private asset managers, the full extent of public pension losses has not been disclosed to pension stakeholders.

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Public pensions just reported their worst quarterly investment performance in over a decade. But results related to 25%-50% of their riskiest investments aren’t included. Thanks to secrecy agreements, reporting delays and valuation wiggle-room granted to hedge, private equity, real estate, infrastructure, venture capital and other private asset managers, the full extent of the losses has not been disclosed to pension stakeholders. Complicity with Wall Street allows public pensions to avoid accountability and push bad performance results off until the next quarter, year or even decade.

To continue reading this Forbes article, please click (here): 

May 18

Independence Institute Launches Tax Reduction Ballot Initiative

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Independence Institute Launches Tax Reduction Ballot Initiative

Independence Institute Launches Tax Reduction Ballot Initiative

To “Energize our Economy” Independence Institute Launches Tax Reduction Ballot Initiative

May 18, 2020

Denver – Independence Institute, Colorado’s free-market think tank, announces its petition drive launch today of a ballot initiative that will reduce the flat Colorado state income tax rate from 4.63% to 4.55%.

The signature gathering process for Initiative #306 will begin today.

The initiative, currently known as Initiative# 306, is supported by the issue committee Energize our Economy. The purpose of this ballot initiative is to get Colorado’s economy back to its former strength, by putting money back into the pockets of those who earned it.

This flat-rate tax cut will also offer voters an alternative to a progressive income tax increase that will also be on the ballot, Initiative #271, that seeks to raise income taxes by $2 billion a year.

“The Colorado economy —pre-COVID-19— was on fire thanks to our Taxpayer’s Bill of Rights and our flat state income tax,” said Jon Caldara, President of the Independence Institute, and co-ballot proponent of the tax rate reduction. “We look forward to giving the voters a real choice between a progressive tax increase which will be billed as a middle-class tax cut, and a real tax cut for every Coloradan. Question is: which one is actually the tax cut? Hint: Not the ballot question that starts “Shall state taxes be increased $2,000,000,000 annually.”

To continue reading this story, please click (HERE):

May 18

TABOR repeal is off the table for 2020. Now it’s Initiative 271, a $2 billion tax hike

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TABOR repeal is off the table for 2020. Now it’s Initiative 271, a $2 billion tax hike targeting the wealthy

Vision 2020 Colorado, a coalition behind a tax system overhaul, tells The Sun it will move forward with a graduated income tax measure that will lower taxes for the vast majority

coalition pushing to overhaul Colorado’s tax system will not pursue a complete repeal of the Taxpayer’s Bill of Rights this year, opting instead for a ballot measure in November that would generate billions in new money with higher taxes on the wealthy.

The new initiative — which is expected to receive final legal approval Wednesday — is designed to create a more equitable tax system in Colorado by lowering the current 4.63% tax rate for households making less than $250,000 a year.

MORE: Colorado’s regressive tax system, and a proposed graduated income tax, explained

An estimated 95% of taxpayers who are below the threshold would qualify for the tax cut, which would take effect for 2021. For those who make more than $250,000, the additional earnings are taxed at a higher rate up to the maximum of 8.9% for annual taxable income over $1 million.

The organizations behind the ballot question, known collectively as Vision 2020 Colorado, expect the new graduated income tax to generate an estimated $2 billion a year in new money with at least half earmarked to increase teacher salaries and retention. The remainder would be spent at the discretion of state lawmakers.

“We know middle-income Coloradans are paying a greater share of the tax burden than the wealthy 5%, but our tax code isn’t just unfair, it’s inadequate,” said Scott Wasserman, president of the Bell Policy Center, a leading proponent of the measure. The tough decisions made by state lawmakers about how to spend the $30 billion annual budget, he added, are “a purely consequence of our state not having enough money.”

To continue reading the rest of this story, please click (HERE):

May 15

Colorado’s State Budget Needs Cutting

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http://coloradosun.com/2020/05/15/jim-morrissey-colorado-delicate-budget-operation/?utm_source=The+Colorado+Sun&utm_campaign=9823376a7f-Sun-Up&utm_medium=email&utm_term=0_2e5f9a0f1b-9823376a7f-64925121&mc_cid=9823376a7f&mc_eid=85f697f874&fbclid=IwAR3W2tJN0HFHvaxLvobX36jYdk6PnN6ydFgy5NNYntH450s2O9MxXD3o3kc

 

May 13

Coronavirus may trigger the second-largest property tax cut in Colorado history, further crippling local budgets

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The reductions under Colorado’s Gallagher Amendment would slash total school district revenue by an estimated $491 million. Fire districts would also be hard hit.

At a moment when state and local governments are already drowning in red ink, Colorado’s constitution is now projected to trigger the second-largest residential property tax cut in modern history.

Under forecasts presented Tuesday, Colorado lawmakers could be asked to cut residential property taxes by nearly 18% in 2021 to comply with a tax-limiting constitutional provision known as the Gallagher Amendment.

For homeowners, it would mean permanent financial relief at a time of rising unemployment and deep economic uncertainty. But if the cut goes through as projected, it would have cascading effects at nearly every level of government in the state, gashing the budgets of property-tax reliant fire districts, county governments and schools.

The reductions would cut total school district revenue by an estimated $491 million. About half of that gap will impact the state budget, which is constitutionally required to backfill certain school funding shortfalls, even as it faces a fiscal catastrophe of its own as sales and income tax revenue plummet. In one fell swoop, it could wipe out all the recent gains the state had made in erasing its unfunded debt to schools, formerly known as the negative factor. At the county level, statewide revenue could drop by $204 million.

To continue reading this story, please click (HERE):

May 08

TABOR: GOOD MEDICINE OR BAD?

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Constraints will help Colorado governments weather downturn

 

Shelby Meyer passes by The Irish Rover, one of many restaurants and bars now shuttered along South Broadway in Denver on April 14. The coronavirus has caused many businesses to shut their doors during the coronavirus pandemic. Helen H. Richardson, The Denver Post

By Peg Brady
Guest Commentary

Peg Brady is a retired software analyst and designer. She has served on the TABOR Foundation Board of Directors for more than a decade.

The Denver Broncos and Food Bank of the Rockies hosted a mobile pantry at Empower Field at Mile High on April 27 to help people in need during the pandemic. RJ Sangosti, The Denver Post

The Taxpayer’s Bill of Rights (TABOR) has provided welcome stability to Coloradans as we all deal with the coronavirus pandemic. This provision of our state constitution allows all governments throughout Colorado an automatic but reasonable annual budget increase. The limits keep governments from growing too fast.

Therefore, when the economy gets into trouble, Colorado state and local governments have a more firm base for their spending and do not need to cut as drastically as other states. Government programs are more sound, strong and sustainable than if they had grown as fast as ambitious politicians often wanted. TABOR helps us to confront the current crisis.

Moreover, just when families and businesses are struggling, the Taxpayer’s Bill of Rights has led to timely tax relief. The state tax system has evolved so that, when times are good, it over-collects tax revenue. Last year, Colorado over-collected $428 million. TABOR mandates that the state rebates to you excess revenue collected during a fiscal year. So, the 2019 tax rate has been reduced from the usual 4.63% to 4.5% — a 0.13% drop.

You won’t receive a tax refund check; instead, the legislature reduced the income tax rate. Because the rebate is being accomplished through the lower tax rate, you may not recognize how much money you saved. Still, because the state will not incur the cost of issuing and mailing checks, we save that expense as well.

To continue reading this TABOR article, please click (HERE):

May 02

Paid family leave ballot measures move forward, with Democratic lawmakers in support

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paid family leave
State Sen. Angela Williams, D-Denver, speaks at a statehouse rally for a Colorado paid family leave program on April 9, 2019. Photo by Joey Bunch/Colorado Politics

The four sponsors of a Democratic-led proposal at the state Capitol have abandoned their legislative proposal and are now endorsing the three ballot measures proposed by Colorado Families First. According to state Rep. Matt Gray of Broomfield, they don’t have a preference and will endorse whatever the ballot proponents put in front of voters.

The four lawmakers talked to reporters Friday about the reasons for letting go of their five-year effort to put a paid family and medical leave program into state law and why they’re backing the ballot measures.

The court orders on ballot initiatives 247 and 248 dealt with a challenge by Kelly Brough, president and CEO of the Denver Metro Chamber of Commerce, which claimed the programs proposed under the ballot measures were a tax and hence violated the provisions of the Taxpayer’s Bill of Rights, which require voter approval for any tax increase. The language of all three ballot measures do not reference TABOR requirements.

 

Apr 29

Denver just pulled $17 million out of the couch cushions for its coronavirus fight

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(The money actually comes from TABOR reserves.)

A blackhawk helicopter carrying U.S. Army Lt. Gen. Todd Semonite flies over Denver toward the Colorado Convention Center. April 14, 2020. (Kevin J. Beaty/Denverite)

A blackhawk helicopter carrying U.S. Army Lt. Gen. Todd Semonite flies over Denver toward the Colorado Convention Center. April 14, 2020. (Kevin J. Beaty/Denverite)

Denver City Council members unanimously approved the move Monday. The money will go toward “shelter costs, medical supplies, workplace safety supplies, and other items required for the city’s response,” a document explaining the allocation states.To continue reading this story, please click (HERE):