Retirement insights from a Colorado PERA perspective

Legislation & Governance

The Year Ahead for Colorado’s Legislature

Photo credit: ChrisBoswell – 636911744- Getty Images

Key points from the story:

  • Like last year, COVID-19 will influence the legislature’s priorities…and its calendar
  • Leaders have signaled they will pause the legislative session, possibly resuming in mid-February
  • Some committee work, including budget writing, will continue throughout this pause
  • All eyes are on the state of the economy

Last year’s legislative session took a strange turn in March. In 2021, it will be unusual off the bat.

On January 13, the legislature will formally start, or “gavel in,” to meet a legal requirement. But it is expected to “gavel out” soon after. This doesn’t mean that session will end. Instead, it will be put on pause until at least mid-February – similar to the mid-session pause we saw last year.

As Colorado’s 100 legislators veer away from the deep ruts of tradition in response to the global pandemic, what will guide them? How will important work get done? What issues will they tackle, and which issues might be pushed aside? These are just some of the many questions Coloradans have as this unusual session begins.

When will work get done?

“The key word still is uncertainty,” said Michael Steppat, PERA’s Public and Government Affairs Manager. “What happens in the building is totally dictated by the external environment.”

Lawmakers don’t have a set date to come back because there’s no way to tell what the public health situation will look like next week, let alone next month.

Lawmakers are still constitutionally bound to meet for no more than 120 days, but last year’s state supreme court ruling means that, during an emergency, the days between gaveling out and gaveling back in don’t count against that limit. This gives increased flexibility to leaders.

What work will get done?

Just because the full legislature won’t meet, that does not mean that legislative work will grind to a halt. Some committees, including the Joint Budget Committee, will continue to meet and move forward with their work.

It might sound obvious, but Steppat said “Lawmakers’ top three priorities are the pandemic, the pandemic, and the pandemic. Everything ties to it.”

As far as PERA-related legislation, Steppat said he’s keeping an eye on the status of PERA’s direct distribution, covered more below. Like the past few years, there’s also a possibility that lawmakers consider legislation related to PERA’s investment program.

Writing the budget

One important waypoint in the legislative calendar is passing a budget. Colorado’s constitution requires lawmakers to pass a budget before they stop work for the year. The Joint Budget Committee (JBC) writes the budget before it’s brought to the full House and Senate.

“Writing a budget isn’t easy, even in a surplus year” Steppat said. “The JBC just went through an unprecedented budget writing process, and that’s not going to get any easier.”

The JBC starts the budget writing process in November and typically completes its proposed budget by late March. The House and Senate usually debate, amend, and pass the budget in the first few weeks of April. From there, it goes to the governor for a signature.

The state’s fiscal year ends on June 30. Steppat said lawmakers likely view that date as a de facto deadline for passing a budget, even if they plan to continue other work into the summer or even fall.

The state of the economy

The sudden shutdown of the nation’s economy led to last year’s budget emergency. As state revenue streams dried up in historic fashion, lawmakers sprinted to cut billions from previously planned spending. Cuts included the $225 million direct distribution to PERA, which PERA On The Issues has covered previously.

Parts of the economy have recovered, but some sectors still face dire circumstances. Overall, uncertainty still looms over everything. To this end, keeping an eye on periodic budget forecasts produced by Legislative Council and the Office of State Planning and Budgeting is a good way to stay abreast of any changes.

Governor Polis indicated support for resuming the direct distribution in his budget proposal. Steppat said he is optimistic the direct distribution will be included in the budget that lawmakers send to the governor’s desk.

Tracking this unusual session

While it will look different, the 2021 legislative session is bound to be consequential as lawmakers steer Colorado through these choppy waters. PERA On The Issues will monitor and share updates on any legislation related to PERA.

Comments

  1. Mr. Smith says:

    The direct distribution is tied to past legislation and is already either budgeted in or out based on the previous year’s performance fiscally? And when I say past legislation I am referring to the bill that cut retirees and future retirees AI and also raised current employees contributing rates. All of which are still very much in effect. If the Direct distribution can simply be omitted from the budget at whim, then PERA once again offers little security for the future.

    • Tom says:

      That seems to be correct. Once again, “Do as I say, not as I do” is in effect, and PERA will be mostly balanced on employees backs.

  2. Ken says:

    The state’s direct distribution (DD) into the PERA trust fund is, and will always be, subject to legislative whim and public sentiment. Each year there will likely be a heated legislative discussion in regards to payment of the DD. I also believe the senior homestead exemption will also come under pressure. Technically, the AI cannot be set permanently at zero percent, but I am anticipating less than 1% for the remainder of the loves of most current retirees.

  3. Cindi DeBoer says:

    Part of the reason that the teachers portion of PERA is underfunded (as let’s be clear, not ALL divisions are underfunded) is that PERA gives them 1 full year of service credit when they they only work 9 months out of the year. Let’s give the teachers only the actual credit for what they work. They are paid quite well for only 9 months of work, and many of them get summer jobs elsewhere to add to their income. The rest of the PERA recipients need to not be supplementing the teachers’ retirements.

    • Tim says:

      I was not/am not a teacher, AND I feel that we dramatically under-pay teachers in the public sector. So, I’m OK with teachers getting a retirement “bump,” as they’ve been underpaid all along…

      • Dr. Darlene Baber says:

        Tim, I am so impressed and grateful for your comments on the reality of teacher pay. Ask any of the parents who are monitoring the work of their children’s teachers and they will tell you that the teachers are in every circumstance under-appreciated and underpaid. So, thanks.

    • Sandi Cummings says:

      If you have known any teachers you will know the extensive time they devote to their job. So we actually work a full year of time in 9 months. WE work in the evenings, on weekends, and are constantly thinking about school and what we do. In addition, we supplement supplies out of our own pocket, many times spending over $1500 dollar per year. I also have bought many coats, gloves, hats and shoes for students whose parents did not buy these for their children. We earned every penny of what we made. Try to shadow a teacher for a day and see all that they do.

  4. David M Lipman says:

    Ms. De Boer fails to recognize that, like (private and public sector) doctors, lawyers, engineers, and others, teachers are required to use the 3 months of summer vacation to upgrade their education to stay abreast of the changing educational environment. Many do not get any financial assistance for that. Yet they are among the lowest-paid professionals. Many work 9 months but their pay is paid over 12 months, meaning they get paid less per month than others who work 12 months and get paid for 12 months. As the brother, husband and father of teachers I am often frustrated by the misunderstanding of what the general public puts them through, especially the fact that if they didn’t get those summer jobs they couldn’t afford to buy the supplies that perpetual budget cuts force them to buy to do their jobs. Those things should be in the budgets of school districts, not the teachers’ pockets. A full year of service credit is precious little to ask of the rest of us.

  5. Margo says:

    While not a teacher, I am disheartened by the comment regarding teachers only getting 9 months of PERA credit. This vocational sector has some of the most important responsibility of society yet they are traditionally undervalued by society. We know they are so underfunded that they often buy thousands of dollars of supplies for classrooms out of their relatively low salaries. Further nowadays, teachers are required to be social workers, health support, behavioral specialists and all sorts of other support to our future community members and most important resource, our children. I for one appreciate that PERA which I contribute to in another PERA segment better supports these very hard working people when per pupil funding in Colorado is close to the lowest in the U.S. thus not allowing adequate teacher salaries. I hope we continue to appreciate their dedication through a comprehensive PERA benefit.

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