Governor Bill Owens, Pioneer of Colorado PERA Pension Mismanagement, Now Shamelessly Offers PERA Management Advice.
In a recent Denver Post opinion piece, former oil and gas lobbyist and Colorado Governor Bill Owens supports the latest corporate campaign attacking the Colorado PERA public pension system (11/20/2014 Denver Post):
As per usual, corporate representatives see evil in the use of taxpayer dollars for deferred public pension compensation, but have no problem with Colorado's diversion of billions of these taxpayer dollars to unearned corporate welfare. Indeed, the elimination of the Colorado PERA public pension system would free up even more taxpayer dollars that could be targeted by corporate lobbyists. (This activity of persuading elected officials to give away public resources can be quite lucrative, see the Colorado Department of Revenue's "Colorado Tax Expenditure Report,"
In reading the recent Bill Owens Denver Post opinion piece I wondered, is the hypocrisy of Colorado politicians infinite? Do our politicians secretly compete with each other in a clandestine hypocrisy contest? Is reaching the pinnacle of hypocrisy a common life goal among politicians?
An excerpt from the Bill Owens Denver Post opinion piece:
"While PERA highlights its average retiree benefits — $3,068 monthly, according to the latest data — this statistic hides the fact that a few retirees make far more than that and the vast majority make far less. Quite simply, the benefit structure, set by the state legislature, is skewed to benefit a minority of public employees at the expense of the rest."
My reaction: This is rich. Bill Owens laments the fact that some Colorado PERA members receive greater public pension benefits than others. Allow me to explain the hypocrisy I see associated with Bill Owens' "concerns."
While in office more than a decade ago, Bill Owens championed the "Bill Owens Colorado PERA Service Credit Fire Sale" scheme (HB00-1458.) Service credit (years of service) in the Colorado PERA pension system were sold, at his urging, at a fraction of their actuarial cost. This Bill Owens scheme represents perhaps the most consequential pension mismanagement event in the history of the Colorado PERA pension system. This mismanagement increased the Colorado PERA pension system's unfunded liabilities (and thus contractual obligations borne by Colorado taxpayers) by billions of dollars. I do not blame Colorado PERA members for taking advantage of this opportunity made available to them in Colorado law at the time. (Indeed, representatives of the Colorado PERA pension system encouraged PERA members to make purchases of "service credit" in those years.) I blame elected officials and members of the Colorado PERA Board of Trustees for acquiescing to this fiscally irresponsible, political ploy. Under the "service credit purchase" scheme, a number of Colorado state legislators (including Bill's political buddies?) were able to buy years of service credit in the Colorado PERA pension plan on the cheap. They then, conveniently, found themselves moving from low-paying state legislative positions to lucrative appointments in the Administration. Thus, their ultimate Colorado PERA retirement benefit was calculated based on the higher final salaries of jobs in the Administration. Since Bill Owens was the prime mover behind this "Colorado PERA Service Credit Fire Sale," I find it astoundingly hypocritical that Bill Owens now has the temerity to complain about the fair distribution of Colorado PERA retiree benefits.
While Governor, Bill Owens persuaded (pressured?) the Colorado PERA Board of Trustees to endorse his "service credit fire sale" scheme, which they obediently and unanimously supported. Bill Owens' goal, at the time, was to rid Colorado state and local government of "expensive" older employees, encouraging them to buy these cheap years of "service credit" and qualify for early retirement. Thus, public employee labor costs were shifted from state and local governments to the Colorado PERA pension system, raising system unfunded liabilities.
The Colorado Supreme Court recently decided to ignore the evidence of Bill Owens' mismanagement of Colorado PERA (and in fact all evidence in a Colorado PERA pension lawsuit) in order to facilitate a reduction of Colorado PERA's unfunded liabilities through breach of contract. Of course, the Colorado Supreme Court necessarily ignored the Colorado and US Constitutions in the process. This transparent political favor provided by the Colorado Supreme Court (to the Colorado Legislative Branch) has tarnished the Colorado Judiciary, and diminished the careers of Colorado judges who actually believe in the Rule of Law. In reading the Decision in the case, Justus v. State, judges on the Colorado Court of Appeals see the true colors of the politically motivated Colorado Supreme Court. If the Colorado PERA pension system had been responsibly managed by past Colorado state legislators and Governors, the Colorado Supreme Court would never have found itself in a position where it was tempted to abandon constitutional principles, Colorado case law, and its integrity.
Given his history, Bill Owens' recent posturing in the Denver Post as a person even remotely qualified to offer public pension management advice lends insight into his character.
An astute observer has noted that:
"Owens dipped into PERA funds through the back door, moving state employees at the top ends of the pay grades from state paychecks to PERA paychecks. In other words, Owens reduced state costs by shifting them to PERA at the same time he reduced the state's contribution percentage, starting the slide from 107% funded to current levels. Granted the slide was accelerated by the economic downturn, but it began when the state figured out how to supplement the general fund by raiding PERA. Last year's SB-1, if upheld by the court opens the front door to PERA resources. Now, any time legislators decide they need PERA funds, they can pay for reducing further the state's contribution by reducing benefits."
(For the record, we should also note that Colorado's public sector union leaders, in supporting SB-1, held open "the SB-1 front door" for Colorado state legislators. In an unprecedented act, in 2010 these union leaders facilitated the elimination of the contractual public pension rights of their own public employee members.)
It may be that (fair or unfair) media coverage during the Owens Administration diverted attention from the responsible management of the Colorado PERA pension system. But, if media reports and blogger comments from that period of Colorado history reflect reality, the hypocrisy of our GOP "family values" Governor extends well beyond the realm of public pension management.
"Owens moved out of the governor's mansion for a while because he and his wife, Frances, had agreed on a separation. Then they reconciled. After he left office, they divorced. There were all sorts of juicy rumors, among them one about a love child growing up in Texas, but if anyone called for Owens to resign, I missed it."
"This may have stalled Owens's national political career, which had looked promising. One right-thinking publication had touted him as
America's best governor and there was serious talk of the vice-presidency or even the Oval Office."
"Owens, a devout Catholic, has touted family values as a cornerstone of his administration. Some immediately questioned what impact it would have on Owens' political career if the couple were to divorce. Owens has been mentioned by conservative Republicans as a potential presidential candidate, even though he has never publicly said he is interested in running."
Comments on the article published at FreeRepublic.com:
"I have always heard that this guy is ultra career minded. He has a PAC in Washington right now, presumably to set up his 08 bid. He also chaired the GOP Gov's Conference, and was an officer with the National Governor's Association."
"Gang, Governor Owens has had an on-going affair for many, many years. It is well known in Republican circles. You can be sure that no high ranking Republican would encourage Bill to pursue any sort of public office under any circumstances. The Party is reeling from a record number of scandals in the ethics area and is quietly getting rid of the worst offenders. You will begin to see Republicans focusing less on family values and more on fiscal and governing issues. One thing the party has realized is that a large percentage of those who loudly tout family values are the worst offenders. Please pray for Frances and the kids, all of whom spent many years home alone. Believe me, they won’t notice much of a difference after the separation."
"Hmmm, obviously these Owens fans aren't from Colorado. It's quite well known here that Owens' personal picadillos [sic] make Bill Clinton look like a saint."
Conservative Columnist Vince Carroll of the Denver Post Condemns the "Bill Owens PERA Service Credit Fire Sale," July 31, 2013 Denver Post:
"The administration of Gov. Bill Owens, in a major blunder, lobbied for the fire sale as a shortsighted way to encourage early retirement and infuse new blood into the bureaucracy."
"Guessing the answer, I asked (Congressman Mike) Coffman if he had purchased years of service from PERA once upon a time. And, sure enough, he replied, 'I did purchase years of service.'"
(Governor Owens, Rep. Coffman has admitted to participating in your PERA "service credit fire sale" by buying years of service credit. You have a chance to be as forthright as Rep. Coffman and answer the question. Did you purchase PERA service credit in the "fire sale" yourself?)
"As (Vince) Carroll notes, this problem was known as early as 2005, when David Milstead of the late, lamented Rocky wrote about it: 'But the deal got sweeter. Gov. Bill Owens, then in the early part of his first term, wanted to streamline government and bring new employees into the state work force. In 2000, with his encouragement – some say pressure – PERA cut the already-low price of purchasing extra years by 14 percent, to 15.5 percent of salary.'"
"Colorado’s state income tax rate was a flat 5 percent until it was lowered to 4.75 percent in 1999 and to 4.63 percent in 2000, under Gov. Bill Owens."
Silver and Gold Record, May 12, 2005:
“Befort also noted that several years ago, the Legislature and Gov. Bill Owens decided to encourage higher-paid employees to retire early. Payroll expenses went down for the state, but PERA’s costs increased, he explained.”
Friends of PERA (an organization that supported SB10-001) in "PERA Quick Facts":
"Laws passed in 1999 and 2000 to reduce the cost to purchase years of service and to provide for earlier retirement were initiated by Governor Owens' office and legislators who wanted to encourage long-term state employees to retire. At the same time that the benefit rules were made better, the employer contribution rates were reduced and the rate employees paid remained the same. These changes were made by the Executive and Legislative branches, not by the PERA board.”
"(Henry) Sobanet also served under former Gov. Bill Owens and was intimately involved in the crafting of SB10-001, the bill passed in 2010 to shore up PERA."
"Hickenlooper, a Democrat, named Henry Sobanet, formerly a budget director for Republican Gov. Bill Owens to do the same job for him."
"Sobanet worked for the Office of State Planning Budgeting as deputy director from 1999 to 2004, when former Owens appointed him as director."
Governing article in 2006:
"In Colorado, at least some of Bill Owens' pension problem was self-inflicted, the result of his pressuring PERA to sell discounted 'service credits' to public employees, allowing them to buy more time on the job." "Owens hoped that state employees would retire early, helping his efforts to streamline government." "Because pensions are, by their nature, a long-term problem, it's difficult to get public officials–classic short-term thinkers–to pay them serious attention even when the bills are coming due."
GAO report, the Colorado Legislature Has Increased Colorado PERA Pension Benefits Without Paying for These Benefits:
"This was also the case in California and Colorado where pension benefit increases in the late 1990s and early in the 2000s helped drive liabilities higher."
From Friends of PERA:
"PERA has been fully funded only two years in its 75-year history – in 1999 and 2000. When it was fully funded, Governor Owens immediately pursued cutting the employer contribution rate and unwisely pushed the Board of Trustees very strongly to reduce the cost to purchase service credit. This action resulted in a very large unfunded liability increase to the fund. When PERA tried to pursue legislative changes to remedy the situation, Governor Owens vetoed the legislation because it did not include a 'defined contribution option' for state employees."
The complete story can be read here at the Denver Post:
Discover the true nature of Colorado government at saveperacola.com.