Legislative session ends with compromises galore

    The 2018 General Assembly has adjourned for the year, ending the session with compromises galore on the biggest issues that faced lawmakers. The final gavel came down just before midnight May 9 in the Senate and at 14 minutes into May 10 in the House.
    In its final 24 hours, compromises on transportation, fixing the Public Employees’ Retirement Association pension plan, rules for selling full-strength beer and reauthorizing the state’s civil rights commission all came together.
    The compromise on PERA may have been the hardest compromise for the House Democrats and the state’s teachers union to swallow. Senate Bill 200 was the last major issue to be resolved in the session. Gov. John Hickenlooper made an unprecedented visit to a House Democrats’ caucus held late on the final day to discuss the agreement hammered out between the sponsors of the bill and to tamp down calls for a special session.
    He told reporters Thursday, May 10, that leaving the issue until after the session could unnecessarily politicize the process. And leaving the issue until 2019 had risks, too, he added. The PERA issue is of critical importance to this General Assembly, he said, and might not carry the same level of concern for the next crop of lawmakers.
    The pension plan is short about $32 billion to cover its current obligations, a debt that grew substantially during the Great Recession and failed to improve after reforms in 2010.
    Lawmakers feared that without a fix, the pension plan wouldn’t be able to provide for the plan’s 585,000 state employees and retirees, and the state’s credit rating could be negatively impacted. The latter is a major concern, given another measure that won approval in the final days: bonding to begin whittling away at a $9 billion transportation wish list.
    The PERA compromise includes the following:
    — A 2 percent increase in employee contributions.
    — An annual $225 million state payment to the plan.
    — A reduction in the annual cost-of-living increases for retirees, from its current 2 percent to 1.5 percent.
    — Raising the retirement age for employees hired after Jan. 1, 2019, to 64 years old for full pension benefits. Teachers currently can retire at 58, and all other state employees can retire at 60. That doesn’t change for those already enrolled in the plan.
    — Expanding the ability of state employees to enroll in PERA’s defined contribution plan, akin to a 401(k). This excludes teachers, which make up about 60 percent of the plan’s members.
    The measure also includes triggers to adjust the contributions and benefits. Those triggers would take place if the plan’s shortfall grows, as well as adjustments if the plan reaches full funding.
    The reforms are intended to put PERA back on solid footing in 30 years, an actuarial standard.

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