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Legislation & Governance

What Election Results Mean for PERA Members

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In Colorado, the 2020 election season is over. PERA-related issues were not on the ballot, but ballot issues can have a downstream effect on PERA.

PERA’s Public and Government Relations Manager, Michael Steppat, joined PERA On The Issues to talk about the election’s outcomes.

Welcome back, Michael. This was a busy election season, and Colorado voters had many issues to consider. What stood out to you?

It was a rollercoaster ride and I’m glad it is over. But seriously, I think something that “stood out” would be Coloradans’ desire to be engaged in the political process. Voter turnout in Colorado was higher than any previous election in the state’s history.

Many of the ballot issues Coloradans voted on will determine fiscal policy in the years ahead. Collectively, what implications will these changes have on the state budget?

Well, there’s obviously a lot of moving parts here, but the impacts to the state budget are huge.

The approval of Amendment B to repeal the Gallagher Amendment is a big deal in terms of how the state manages fiscal policy moving forward, but also prevents budget cuts that would have gone through in the next fiscal year had it not passed.

The voters also approved a tax cut, but the repeal of Gallagher and a tobacco tax increase are expected to bring in enough revenue to more than offset the income tax rate cut.

At the federal level, talks for another fiscal stimulus bill have been stalled for months. Now that the election is over, will negotiations quicken, or shouldn’t we expect so see anything materialize until 2021?

TBD. It’s difficult to predict what happens in Congress even under normal circumstances. Hopefully there will be some movement in the lame duck session to pass another stimulus bill, because it is desperately needed across the country. 

Using federal stimulus dollars for state and local budgets has been one of the biggest issues of disagreements thus far. How would these dollars be used? If they were included in a future stimulus act, would they increase the likelihood that PERA receives a direct distribution in 2021?

That is the million-dollar question. Would these dollars come with strings attached or will state/local governments have some flexibility? Most will again be focused on the state’s budget situation entering the next legislative session.

We hope to meet up with you again in early January when we publish our annual legislative preview. Until then, what will you be watching as next year’s legislation session begins to take shape?

Lawmakers will again be focused on policy responses to COVID-19. However, the extent to which other priorities can be addressed will largely depend on what happens these next few months from a public health standpoint.

Comments

  1. Jim in Littleton says:

    I thought the Gallagher repeal was Revenue neutral to the State, but just reallocated the Revenue between Residential and Commercial real estate owners.
    Is this a misconception?

    • PERA On The Issues says:

      Hi Jim. Great question. The measure (Amendment B) repeals several constitutional provisions regarding property taxes, commonly known as the Gallagher Amendment. One of the requirements that was repealed was that the residential assessment rate be changed in order to maintain the target percentage. However, the ultimate impact of the measure depends on what future legislative action would have been in its absence. Under forecasts presented to lawmakers earlier this year, residential property taxes would have to be cut by 18% to comply with the Gallagher Amendment. This would have meant less tax revenue for local governments to fund services and the State to backfill the shortfall. However, this scenario is no longer relevant given the voters’ approval of Amendment B and repeal of Gallagher.

  2. Fran Aguirre says:

    Nothing was asked about the climate crisis. Many others including myself are still concerned about the health and safety of Colorado citizens with regard to PERA’s lack of divesting from fossil fuels especially coal. I understand that PERA does not like to be told what to do. All I can say is that the investors need to get in front of this crisis and not always be lagging behind.

    • Glenn says:

      PERA keep investing in fossil fuels we need investments that will help keep PERA solvent.

    • Bob says:

      PERA, please keep investigating in fossil fuels and encourage a more friendly dialogue between the Colorado State Government and our fossil fuel industries.

    • Steve says:

      We need PERA to keep investing in all industries. We cannot tie the hands of PERA’s investment professionals to meet a social agenda. Let them use every tool/opportunity they need to succeed.

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