Many Colorado teachers, already facing pay cuts next year because of various district budget-reduction tactics, could see additional losses in take-home pay under a bill amended and passed by the House Finance Committee Wednesday afternoon.
But they would get the money back years in the future in the form of pensions from the Public Employees’ Retirement Association.
As amended on a 7-6 Republican-Democratic vote, Senate Bill 11-076 would give school boards and local governments the option of reducing their contributions to employee pensions by as much as 2 percent while increasing payroll deductions for employees by a like percentage.
The committee passed the amended bill on an 8-5 vote, with Rep. John Kefalas, D-Fort Collins, joining GOP members in support.
As passed by the Senate, the bill proposed only to reduce the amount that the state and colleges contribute to employee pensions and to raise employee contributions. The net effect would be to make it somewhat easier for the legislature to balance the 2011-12 budget by freeing up about $34 million in the general fund. (Some $15 million of savings would be in higher education, and governing boards would get to keep that money.)
Worker take-home pay would be reduced, even though civil servants would get the money back later in retirement, or if they cash out of the PERA system early.
The bill proposes a 2.5 percent switch, the same as applied in the current 2010-11 budget year to state employees and many higher education workers. The Joint Budget Committee proposed renewing the contribution swap for another year because of the state’s continuing revenue shortfall.
While the committee’s action will not be welcomed by public employees, teachers and local government workers, it’s not the last word on the matter. The pension contribution question is caught up in the larger issues of balancing the 2011-12 state budget and softening expected cuts to K-12 education. All of that is still in play, and the ultimate solutions will require compromise between the Republican-majority House and the Democratic-controlled Senate.
The amendment approved by the committee Wednesday is pretty much identical to a stand-alone Republican measure, Senate Bill 11-074, which was killed Feb. 14 in the Senate State Affairs Committee.
Also still in play is the size of the cut to state and higher education employees, Gov. John Hickenlooper’s proposed budget suggests that the state and colleges reduce their contributions by a total of 4.5 percent, with employees seeing that additional percentage taken from their checks.
House Finance Chair Rep. Brian DelGrosso, R-Loveland, Wednesday proposed an amendment to do just that, although he said he hadn’t consulted with the administration. That proposal died on a 6-7 vote, with freshman Rep. Keith Swerdfeger, R-Pueblo West, joining all committee Democrats in opposition.
Another complication is the potential impact of contribution swaps on the health of PERA. Eligible employees who leave the system before retirement can withdraw their contributions (along with a 50 percent match and interest). But employer contributions remain in PERA, helping its solvency. When contribution swaps put more employee money into PERA that potentially means more money can be taken out of the system than would be otherwise.
Legislative fiscal analysts estimate the original form of the bill will increase the unfunded liability of PERA’s state division by $6.6 million.
The committee spent nearly three hours on SB 11-076, hearing lengthy testimony from state employees who opposed the bill and related stories of hardship caused by wage freezes and furloughs in recent years.
There was just the faintest whiff of different partisan attitudes about public employee pay and pensions, but the discussion overall was extremely civil and sympathetic, in contrast to the superheated partisan debates taking place in Wisconsin and elsewhere.
Things did tense up a bit when DelGrosso proposed his amendments, which had been distributed to members only a few hours earlier. Several committee Democrats complained that the issues should be left to the JBC and that the potential impacts on PERA needed more discussion.
Rep. Jon Becker, R-Fort Morgan and sponsor of the bill, opposed the two amendments on the JBC’s behalf. (He did say that personally, as a rural legislator, he kind of liked the idea of giving small districts a chance to reduce pension costs.)
Just before the final vote on the bill, DelGrosso said, “Everybody was very respectful today. … I thank everybody for that.”
The Senate State Affairs Committee voted 3-2 to kill House Bill 11-1007, which would have allowed Mesa State College classified employees to hold an election on whether to opt out of the state personnel system. If the election supported opting out, individual employees could have chosen to remain with the state system or become exempt employees under the college’s own personnel procedures.
Some Mesa employees felt they would have better chances for raises under the college system, but other workers have opposed it because they fear loss of state system protections.
Committee chair Sen. Rollie Health, D-Boulder, made it clear where he stood well before the vote. “My problem, and what I conveyed to President [Tim] Foster, is that you’re not out there alone. You’re part of a broader system. … I happen to believe we just can’t pick and choose.”
Foster is a well-known advocate of independence for individual state colleges and also has been critical of greater regulatory control of higher education by the Colorado Commission on Higher Education.
The state affairs committees in each house are where majority leadership traditionally sends bill to die.
The Senate Education Committee passed two bills Wednesday morning.
House Bill 11-1169 would allow campus police to share more information about possible threats with deans, threat assessment teams and other administrators. The vote was 7-1, with Sen. Scott Renfroe, R-Greeley, the only no vote. A handful of conservative Republicans are concerned the bill could be a threat to free expression, such as voicing of unpopular political views.
Senate Bill 11-188 would create new procedures for handling troubled charter schools that have facilities debts under a state bonding program. The measure is designed to avoid defaults. An earlier version of the bill was killed, and SB 11-188 was introduced as a bipartisan solution. It passed the committee 7-0.
Use the Education Bill Tracker for links to bill texts and status information