Bitter Pill

Teachers union opposes 401(k)-like provision in Colorado pension overhaul bill

PHOTO: Denver Post file

Colorado lawmakers Wednesday unveiled one of the most anticipated bills of the session – an overhaul of the public employee pension system in which most public school teachers participate – and the teachers union immediately raised alarms about a central provision.

Along with increasing employee contributions, cutting benefits for retirees, and raising the retirement age, the bill calls for the creation of a defined-contribution option within the Public Employees’ Retirement Association, similar to the 401(k)s available to many private sector employees, for workers hired after Jan. 1, 2020.

“The alarming provisions in this bill to expand a defined-contribution or 401(k)-style plan do absolutely nothing to achieve the goal of fully funding PERA in 30 years,” Colorado Education Association President Kerrie Dallman said in press release. “A drastic overhaul to PERA with political ornaments like defined-contribution are only being driven by well-funded, out-of-state interests such as the Koch Brothers and the Arnold Foundation. Our legislature needs to ignore the outside voices and instead focus on solutions informed by reliable data.”

The bill, whose sponsors include state Sen. Jack Tate, a Centennial Republican, and House Majority Leader K.C. Becker, a Boulder Democrat, also calls for:

  • Employee contributions to increase by 3 percentage points over the next two years
  • Taxpayer contributions to increase by 2 percentage points during the same period
  • Annual cost-of-living raises for retirees to go down to 1.25 percent from the current 2 percent
  • An increase in the retirement age, not just for new employees but also for current employees who are 46 or younger
  • The creation of a legislative oversight committee
  • A fail-safe mechanism to allow automatic adjustments of benefits and contributions if necessary for the financial stability of the fund

As The Denver Post’s Brian Eason reports, Republicans consider the creation of a defined-contribution plan to be the necessary sugar that allows them to swallow the bitter pill of increased taxpayer contributions. But this proposal as introduced doesn’t have the votes to get out of the Democratic-controlled House, which means the final version will look different – if we get a PERA bill at all out of a divided legislature in an election year.

Ushering the bill through a split legislature in an election year will be tricky, and there’s something in the bill for each side of the pension debate to hate. The defined contribution provision, coupled with the steeper cuts to benefits backed by Hickenlooper, will likely draw significant opposition from public-sector unions and Democratic lawmakers. The plan also increases government contributions, an idea that (Gov. John) Hickenlooper, (Treasurer Walker) Stapleton, and many conservative lawmakers oppose.

Dallman stressed that the teachers union understands that shoring up PERA’s solvency will require “shared sacrifice.” What that means in practical terms is that increased employee contributions and reductions in cost-of-living increases for retirees are negotiable and very much on the table.

But the union considers the 401(k)-like plan unacceptable. Dallman tied the issue to the difficulty many districts have in hiring enough teachers in certain subject areas and in certain parts of the state. PERA’s defined retirement benefits, so rare now in the private sector, help teachers tolerate low wages and sometimes challenging working conditions.

“Educators who teach our children for a long career have earned a stable income that affords them a good quality of life in their retirement years,” Dallman said. “The defined benefits of PERA allows retirees to remain solid, dependable contributors in their local economies in all market conditions, and demonstrates Colorado’s dignity and respect for public employees who continue to make our state a great place to live, work and raise a family.”

Past proposals to create defined-contribution plans have been expensive, the Post reports, because the system needs money from current employees to pay retirees. This bill tries to avoid that problem by requiring public agencies to backfill some of the lost contributions of non-participating employees.

PERA, which replaces Social Security for public school teachers and many other public sector workers, has roughly 566,000 members statewide. The program has only 58 percent of the necessary assets to pay its retirement obligations, with an unfunded liability between $32 billion and $50 billion.

Earlier this year, Eason looked at how the program ended up in trouble less than a decade after it was supposedly fixed the last time.

Correction: An earlier version of this story described PERA’s unfunded liability in the millions. It’s in the billions.

not so fast

Worried about enrollment, some Colorado school districts are suing to prevent cross-district busing

Haylen Orgunez, 14, hangs out the window of one of the new compressed natural gas buses as he poses for a group photo at Douglas County High School in Castle Rock, Colorado on November 16, 2016. (Photo by Seth McConnell/The Denver Post)

Six school districts and the associations that represent them are suing to stop a change to Colorado law that could increase access to school choice but that was approved under questionable circumstances.

The lawsuit filed this week in Denver District Court doesn’t deal with the merits of the policy but with the way it was enacted. In the last days of the 2018 legislative session, state Sen. Owen Hill, a Republican from Colorado Springs, took language from a defeated bill related to school choice and transportation and attached it as an amendment to a bill dealing with educational barriers for foster youth.

In a signing statement, Gov. John Hickenlooper said the maneuver potentially violates the “single-subject rule,” which requires that each bill deal with a one topic clearly expressed in the title of the bill and that any amendments also relate to that subject. He predicted there could be a lawsuit over the issue, and two months later, here we are.

The plaintiffs in the case are the Colorado Association of School Executives, the Colorado Association of School Boards, the small Englewood and Sheridan school districts in south suburban Denver, the Cheyenne Mountain district in Colorado Springs, the Monte Vista district in southwestern Colorado, the Poudre district based in Fort Collins, and the Jefferson County school district, the second largest in the state. Jeffco Superintendent Jason Glass and Poudre school board member Cathy Kipp also joined the lawsuit.

The lawsuit claims the “operations and finances” of the districts will be affected by legislation that was passed “in a manner and by a process expressly prohibited by the Colorado Constitution and in derogation of these plaintiffs’ constitutionally protected interests as stakeholders in the fairness, integrity, and transparency of the legislative processes employed by the Colorado General Assembly.”

“The bill was originally about foster care children,” said CASE executive director Lisa Escárcega. “And at the very end of the session, they rewrote the last part, and expanded it to all children. Those are the reasons why we’re filing the lawsuit.”

Hill called CASE’s position “a complete lie,” noting that that organization along with the school board association and the Sheridan and Englewood districts also opposed the standalone bill on which his amendment was based.

“Everything we vote on, we vote on the merits of the policy,” Hill said. “That’s what this is about for the unions and the districts. They don’t want kids to have the freedom to go across district lines.”

The foster youth bill seeks to make it easier for these students, who have some of the lowest graduation rates in the state, to finish high school by requiring child welfare officials and school districts to work out transportation to the student’s home district when that’s in the child’s best interest. It also creates flexibility around graduation requirements when students do change schools. The bill’s title is “Improving Educational Stability for Foster Youth.”

The tacked-on language says that a school board “may furnish transportation” to students who are enrolled in the district but who live in another district. The provision applies to all students, not just those who are in the foster system. It also strikes language from existing law that requires the consent of the school district from which students are being bussed.  

Similar language appeared in a bill sponsored by Hill called “Improving School Choice in Traditional Schools.” Students in Colorado can enroll in any school that has room for them and can meet their needs, but most students who go somewhere besides their neighborhood school don’t get transportation, something that advocates for school choice have long criticized as a major barrier for students from low-income families, whether they’re moving between districts or within one.

In 2015, Pueblo City Schools blocked the Pueblo 70 district from running buses through its jurisdiction to pick up some of the roughly 150 students who opted into the higher-performing district that primarily serves the surrounding county.

In opposing the original transportation provision, superintendents from Sheridan and Englewood raised the prospect of districts running busses through more affluent neighborhoods, siphoning off those students and the state funding that goes with them, while leaving poorer districts to educate those with the greatest needs.

Jeffco Public Schools is in a different position. In an email, Glass said his district might see net enrollment growth from this change, but he worries about the broader implications.

“We bring in approximately 3,000 more students than we lose to inter-district school choice and that trend would likely grow if this provision in the foster care bill comes to pass,” he wrote. “At issue for us is the violation of the single-subject element of the state constitution. This choice amendment would represent a seismic shift in education policy in the state. Such changes should be considered through open and transparent debate in the legislative process, not tucked in as a last minute amendment under another bill title.”

In an interview, Hill said the transportation provision was a necessary component of the foster youth bill because the state couldn’t simultaneously require that these students be transported back to their home schools while retaining the requirement to get consent from the district in which they now reside.

Hill never made this argument in committee. There was no discussion at all when the amendment was proposed and adopted, and advocates for the foster youth bill didn’t raise it as a concern. School districts already provide transportation to homeless youth who want to remain in their home schools under provisions in federal law, and foster youth are entitled to similar services. The transportation envisioned under the foster youth bill could also occur through rideshare services or by reimbursing foster parents for mileage, and nothing in state law prevents simply driving a student to school in another district.

The plaintiffs are seeking an injunction to prevent the law from taking effect while the matter is litigated.

The lawsuit names Hickenlooper, Education Commissioner Katy Anthes and the State Board of Education as defendants because they oversee implementation of these laws. Representatives of the governor’s office and the state Department of Education declined to comment on the lawsuit. The State Board of Education did not take any position on the legislation in question when it was being debated at the Capitol.

The Attorney General’s Office is charged with defending the state from the lawsuit. A spokesperson for the attorney general declined to comment.

This article has been updated to include comment from Jeffco Superintendent Jason Glass and a response from the Attorney General’s Office.



Local control

Change in Colorado law sets up a ‘David and Goliath’ school choice battle no one saw coming

PHOTO: Andy Cross/The Denver Post
Paraprofessional Ben Johnson washes of the back window of a bus at the Denver Public Schools Hilltop Terminal November 10, 2017. (Photo by Andy Cross/The Denver Post)

Buses from other school districts already pass through the tiny Sheridan school district, picking up homeless students who are entitled by law to transportation to their home districts in nearby Littleton or Denver.

What if those buses could make a few additional stops, picking up perhaps dozens more students who aren’t homeless but prefer to attend higher-performing schools in other districts — and taking with them tens of thousands of dollars in state funding?

That’s the concern of small, relatively poor districts in Colorado after a last-minute provision tacked onto an unrelated bill in the closing days of the legislative session became law. It allows school districts to run buses through other districts’ boundaries without first getting consent, a change from current law.

“Will we start to see the David and Goliath of school choice, where a large district with lots of resources starts to do a marketing campaign and send buses into smaller districts?” Sheridan’s outgoing Superintendent Michael Clough asked in an interview with Chalkbeat.

The Colorado Association of School Executives, which represents superintendents, is exploring the possibility of a lawsuit. The Sheridan district is among the potential plaintiffs, after publicly opposing this change when it was part of a stand-alone bill earlier in the session, though no district has made a formal decision about legal action.

The lawsuit wouldn’t target the substance of the policy, but the way it was enacted. Colorado’s constitution requires that each bill deal with a single subject, clearly expressed in the title of the bill, and that any amendments also relate to that subject.

The transportation provision in question was slipped into a bill on educational stability for youth in foster care that also has a transportation component. In a signing statement attached to the foster youth bill, Gov. John Hickenlooper said it likely represents a violation of the single-subject rule and would be open to a legal challenge.

“We make no judgement today on whether this language is sound policy,” Hickenlooper wrote of the amendment. “However, we have serious concerns about the process in which this amendment was bolted onto such an important bill.”

Foster youth have the lowest four-year graduation rates in the state, much lower even than homeless youth and students whose parents are migrant workers. The bill seeks to make it easier for these students to graduate by requiring child welfare officials and school districts to work out transportation to the student’s home district when that’s in the child’s best interest. It also creates flexibility around graduation requirements when students do change schools. The bill’s title is “Improving Educational Stability for Foster Youth.”

The tacked-on language, added in the Republican-controlled State Affairs committee five days before the end of the session, sounds relatively benign. It says that a school board “may furnish transportation” to students who are enrolled in the district but who live in another district. The provision applies to all students, not just those who are in the foster system. It also strikes language from an existing law that requires the consent of the school district from which students are being bussed.  

Where did this come from and why was it added on?

State Sen. Owen Hill, a Colorado Springs Republican and chair of the Senate Education Committee, sponsored a bill earlier in the session with the same transportation provision. It was called “Improving School Choice in Traditional Schools” and also contained requirements to standardize the open enrollment process.

Students in Colorado can enroll in any school that has room for them and can meet their needs, but deadlines and procedures vary from district to district. Most students who go somewhere besides their neighborhood school don’t get transportation, something that advocates for school choice have long criticized as a major barrier for students from low-income families, whether they’re moving between districts or within one.

Hill’s bill was opposed by the Colorado Association of School Executives and by the Colorado Association of School Boards. They said allowing districts to run school buses in neighboring jurisdictions at will would represent a serious erosion of local control and call into question the entire purpose of school district boundaries. 

Wendy Rubin, superintendent of the suburban Englewood district south of Denver, raised the specter of neighboring districts offering bus service to more affluent neighborhoods and siphoning off the funding associated with those students while leaving Englewood to educate those with greater needs.

Like Sheridan, Englewood is a small district surrounded by larger, wealthier neighbors that post better test scores.

“If we lose a class of kids, we lose a teacher or we offer one AP class when we used to offer three,” Rubin said. “We do not have the economies of scale to withstand losses of kids of 30 or 40 in a year. We would be cutting programs left and right. And what does that do to the kids who stay?”

Rubin and Clough also worried that the legislation would allow districts to cherry-pick students – offering transportation to, say, a star athlete but telling a student with disabilities that it was unable to meet her needs.

To be clear, both superintendents said they have no reason to believe their neighboring districts have immediate plans to come after their students, but they fear future school boards might make different decisions, particularly if declining enrollment increases competition for per-student dollars. 

Supporters of expanding transportation options say such possible challenges do not outweigh the importance of students being able to pursue the best education available to them. If districts want students to stay, they should offer a high-quality education, not block buses from entering their borders, they say.

Kelly Caufield of the business-oriented education reform group Colorado Succeeds pointed to a 2015 case from Pueblo. The lower-performing Pueblo 60 district is surrounded by the higher-performing Pueblo 70 district, and roughly 150 students who lived in 60 used their open enrollment rights to go to school in 70. Pueblo 70 had 10 bus routes within the boundaries of Pueblo 60 – until Pueblo 60 said no.

“Why should a superintendent worried about neighborhood lines get in the way of that student having access to a better education?” Caufield asked. “This is the exact example where that kid and their family deserve to be in a better district. And if transportation is a barrier, this bill would address that.”

The Colorado Springs area that Hill represents also has numerous districts in close proximity to each other. None of them have weighed in publicly on this issue. Hill said he brought the bill forward at the request of constituents, but none of them testified before the committee.

Hill’s bill passed the Republican-controlled Senate but died in a Democratic-controlled House committee near the end of the session. The next day, the foster youth bill came up for its first vote in the Senate State Affairs committee. Filling in as chair, Hill amended the bill without explaining what his addition would do. With the 2018 legislative session nearing its close, the committee members had a long agenda in front of them representing hours of testimony and votes, with tight deadlines to move bills to the floor. No one asked any questions or raised any objections, and the amended bill was adopted.

Hill has pushed back repeated interview requests with promises to try to talk soon. He’s involved in a heated three-way primary campaign – the election is Tuesday – to unseat sitting U.S. Rep. Doug Lamborn. When his school choice bill was heard in committee, he expressed surprise that the transportation provision was controversial and suggested it could be struck from the bill to save the rest of it.

Caufield said Colorado Succeeds wasn’t involved in the decision to amend the foster youth bill, but said, “we care about what’s good for kids, so we’re excited that it crossed the finish line, even if it’s in a different form.”

Clough said Sheridan is prepared to sign on to a lawsuit. Rubin stressed that she had had only a very preliminary conversation with her school board informing them of the situation and the possibility of a lawsuit.

The law is scheduled to go into effect Aug. 9, but school districts may seek an injunction stopping the transportation provision.