Addressing Colorado’s $32 Billion Unfunded Pension Liability
The long-awaited public employee pension reform bill has been introduced and is being debated in the legislature. Senate Bill 200 was introduced last week and heard in the Senate Finance Committee on Tuesday. This issue is of critical importance to the Chamber and a top priority for this legislative session – we chose to support this bill.
While the bill isn’t perfect, it does address many of the recommendations the Chamber has submitted to the governor and members of the legislature, including:
- Increasing the highest average salary by two years for all divisions
- Changing contributions rates to be applied to the higher gross salary rather than the lower net salary
- Increasing member contributions by 3 percent by Jan. 1, 2020
- Increasing the retirement age to 65 with a minimum of five years of service for new members
- Increasing the retirement age for current members by one year for every four years that the member’s age is less than 46 years on Jan. 1, 2020
- Reducing COLA (cost of living adjustment) to 0 percent for the next two years, thereafter decreasing the regular COLA to 1.25 percent
- Creating a legislative PERA oversight committee
Testifying on behalf of the Chamber and the Metro Denver Economic Development Corporation, J. J. Ament, CEO of the Metro Denver EDC, reinforced the importance of making the changes that are necessary to improve the financial viability of PERA in this 2018 legislative session: “In our judgement we cannot wait for perfect. The unfunded liability is inefficient, it’s expensive and it’s unsustainable. Just the interest alone in the unfunded liability costs the system more than $200 million a year… The status quo has already impaired the state’s credit rating and is increasingly cited nationally as being in part of the decline of Colorado’s competitiveness vis-à-vis other states. The time to act we believe is now.”
We will continue to monitor this bill and work with legislators to make improvements to it.\
Letter Sent to the President on Tariff Proclamation
This week the Chamber, along with numerous partners from across the state, sent a letter to President Trump urging against across-the-board tariffs on aluminum and steel outlined in his recent proclamation. While we agree that there are bad actors who threaten the U.S. economy by violating existing trade agreements, we believe that across-the-board tariffs are not the right solution for our country, and valued trading partners who follow the rules should not be punished.
More Testimony at the Capitol
In addition to testifying on the pension reform bill, the Chamber testified on two additional bills.
House Bill 1256 extends the Colorado Civil Rights Division and the Colorado Civil Rights Commission through Sept. 1, 2027. The Division and Commission are charged with enforcing the state's anti-discrimination laws in the areas of employment, housing and public accommodations. They are a valuable and less costly resource for business, especially small business, to resolve discrimination disputes through arbitration and educational programs.
House Bill 1217 creates an income tax credit for an employer who makes a contribution to an employee’s 529-qualitied state tuition program account for income tax years 2019 through 2021. Investment in professional and educational development for our workforce not only creates a competitive edge for companies to recruit and retain employees, but ensures our workforce can meet the demands and access the knowledge and training necessary to fill the jobs vital to our economic success.
New Policy Positions
The Chamber weighed in on three bills this week.
The Chamber supports:
- Public Utilities Commission Electric Utilities Economic Development Rates (HB18-1271)
- Modifications to PERA Public Employees’ Retirement Association to Eliminate Unfunded (SB18-200)
The Chamber opposes:
Reduce Greenhouse Gas Emissions by 2050 (HB18-1274)
