GOP Hopes for State House Fade Under Wave of Ineptitude

“I don’t believe in coincidences.”

Any good fictional detective will usually mutter a similar phrase at some point in a story. The phrase usually means that if two or more occurrences seem like a coincidence, it’s probably connected in some way…and, yada, yada, yada…Scooby Doo and the gang foil another plot by criminals dressed in elaborate costumes.

What does this have to do with Colorado politics, you ask? Well, here at Colorado Pols, we are always skeptical of coincidences (and not just when it comes to talking dogs). And in recent months, the manner in which Republicans have stumbled across many of their nominees for State House seats has raised our collective eyebrows. Republican candidate recruitment (and the lack thereof) has been so comically inept that its problems can’t just be dismissed as coincidence.

Do Republicans believe there is some strategic advantage in waiting until the last possible minute to finalize candidates? Or are really they just ludicrously disorganized and discombobulated as they ponder how they can win control of the House in 2014? We’re inclined to go with the latter explanation; there is no way someone could have actually thought this up on purpose.

GOP State House Confusion

There are 65 House Seats on the ballot every two years, but only a fraction of those seats are really “winnable” in any given year. In 2014, Republicans could gain control of the House with a net gain of 5 seats, though the odds of this happening are beginning to seem as likely as Dudley Brown officiating a same-sex marriage ceremony. Republicans have a host of problems related to their State House campaigns, the most glaring of which is also the most important: Finding strong candidates to run.

In the last 6-8 weeks, Republicans have been playing a weird game of musical chairs in 5 House Districts (HD3, HD23, HD28, HD29, HD35), changing out one bad candidate for another or secretly quietly filling vacancies without bothering to send out so much as a press release to the media. In several other districts, Republicans have fielded last-minute candidates with little name recognition in their respective districts.

Nature abhors a vacuum, and politics is no different. With no competition for the Republican nomination in many House seats, solitary candidates arose like the walking dead, dragging minor connections with Tea Party and gun rights groups (including RMGO) behind them. Perhaps Republican House leadership, piloted by Reps. Libby Szabo and Brian DelGrosso, had given up on trying to recruit decent candidates for several competitive races. But somebody still needed to fill those seats, and as the GOP quickly learned, there’s no telling who might emerge through the caucus process. As it turned out, many of the GOP nominees for competitive House seats were so unfathomably terrible that Republicans had to scramble to replace them to prevent outright disaster that could doom the entire Republican ballot.

So how did we get here? The landscape for Republicans in 2014 has been markedly different from the 2012 election cycle, and the fallout from a disappointing election two years ago is partly to blame for GOP struggles this year. In 2012, Republicans recruited fairly strong candidates overall and outspent Democrats by a 2-1 margin (including both soft and hard money) in hopes of expanding on their one-seat majority in the House. But Democrats ran solid House campaigns with strong candidates who excelled at both fundraising and grassroots outreach; when all the votes were counted, Democrats picked up 5 seats to give them a new 37-28 majority.

The demoralizing results of 2012 gave way to new Republican House leadership, but Szabo and DelGrosso have struggled to date in managing the broad strategy for retaking the House. There is little margin for error when trying to capture the majority in a state where only a handful of the 65 House seats are truly competitive districts, yet Republicans were having trouble uncovering live human beings willing to put their name on the ballot. When candidates arose anyway, the GOP had a new problem on its hands.

Nate Marshall, GOP candidate for HD-23.

Nate Marshall, briefly the GOP nominee in HD-23. Also a convicted felon with ties to white supremacist groups.

Consider HD-23, where Nate Marshall was nominated at the county assembly by virtue of being the only Republican interested in running for the seat. Marshall may have seemed like a nice-enough guy when he raised his hand at the county assembly in March, which was enough to grant him the Republican nomination; but a cursory online search quickly revealed that Marshall was a convicted felon with ties to white supremacist groups. Whoops!

Republicans quickly called on Marshall to resign as the GOP nominee, but they didn’t finally hold a vacancy committee until nearly one month later. They eventually settled on Jane Barnes, a former member of the Jefferson County School Board, as their nominee in HD-23…and then they didn’t bother to tell anyone. In fact, Colorado Pols broke the news of Barnes’ candidacy, nearly two weeks after a vacancy committee made the selection. You would think Republicans would have been a bit more anxious to put Nate Marshall in their rearview mirror.

We might have been inclined to consider this a random event that unfolded under a strange set of circumstances…except that it keeps happening. In late June, former HD-29 Rep. Robert Ramirez ended his campaign after failing to file numerous campaign finance reports. Republicans in HD-29 again called a vacancy committee – and again, nobody seemed to know about it – and just last week it was finally reported that Susan Kochevar had been chosen to replace Ramirez.

Republicans have managed to avoid problematic candidates before they were formally nominated, as they did in HD-35 in selecting Mike Melvin instead of Maria Weese (though Melvin may only be slightly better). As you can see from the chart above, Republicans have had trouble with recruiting candidates in at least 7 competitive House Districts, severely hampering their chances of winning control of the State House. But now that they have their candidates in place (theoretically, anyway), can Republicans pull together the resources in win in 2014? As we’ll examine in Part 2 of our look at the State House races to watch, raising money has been just as difficult as finding candidates.

How could radio host resist asking Beauprez if he really thought Hick was drunk during pool game with Obama?

(Seriously? – Promoted by Colorado Pols)

“Both Ways” Bob Beauprez (right).

Bob Beauprez suggested over the weekend that Hickenlooper was drunk when he played pool last week with President Obama.

Beauprez made the comment on Craig Silverman's debut radio show Saturday on KNUS 710-AM. Here's the exchange:

Silverman: Bob Beauprez, tell me this, because you could lock up a lot of votes if you give the right answer. Can you play pool better than John Hickenlooper?

Beauprez: [hearty laugh]

Silverman: I mean, it went – did you watch him play? He looked like he was sick!—like there was poison in his beer. He scratched, and he missed one of the easiest shots in the world. Tell me you can do better, because he got beat on his home tavern court by Barack Obama. That’s the first foreign victory for Obama in a long time. And –

Beauprez: [laugh]

Silverman: I mean, it looked like Obama was having a good time, but – I don’t know, how do you think that all went down?

Beauprez: John might have been at the brewery a little bit ahead of the President. He might have gotten an early start on the beers. [BigMedia emphasis]

Silverman: Yeah.

Beauprez: Yeah, that wasn’t his finest moment.

LISTEN: Beauprez Suggests Hick was drunk when playing pool with Obama

It's possible Beauprez was joking, I admit, but if he was, it's not clear at all. If you're Silverman, how could you resist asking Beauprez if he was seriously suggesting that Hick was drunk.

Coffman Can’t Spin His Way Out Of Losing To Romanoff Again

Rep. Mike Coffman.

Rep. Mike Coffman.

FOX 31's Eli Stokols reports, time to break out the hip waders in the marquee CD-6 race:

Congressman Mike Coffman’s campaign is claiming momentum after winning the June fundraising period over Democratic challenger Andrew Romanoff in one of the most competitive House races of the 2014 cycle.

Coffman’s campaign brought in $405,000 between June 5 and June 30, more than Romanoff, who raised $373,000 in the latest reporting period…

The problem is, fundraising performance is generally measured by the quarter.

The press release from Coffman’s campaign didn’t mention that it brought in $742,000 during the year’s second quarter as a whole, which is $100,000 less than the $842,000 quarterly haul Romanoff’s campaign announced Monday. [Pols emphasis]

Mike Coffman's campaign spin notwithstanding, this Q2 of 2014 was the fourth straight quarter in which Democrat Andrew Romanoff has outraised one of the nation's most vulnerable incumbents. Romanoff is almost $400,000 ahead of Coffman now in terms of cash on hand–$2.67 million to $2.3 million. It makes sense, given that Coffman's lackluster fundraising is increasingly casting a shadow on his campaign, that they would try to find some way of spinning this result. In the one month of June, Coffman can plausibly say he barely beat Romanoff.

But as you can see, reporters aren't buying the spin. And when that happens, sometimes the spin becomes the story.

New NBC/Marist Poll: Udall Up By 7, Hickenlooper Up By 6

Mark Udall, Cory Gardner.

Mark Udall, Cory Gardner.

A new poll out today from NBC News/Marist has very bad news for Colorado Republicans–beginning with GOP Senate candidate Cory Gardner, who is now down by 7 points to incumbent Sen. Mark Udall, outside this poll's +/- 3.1% margin of error:

In Colorado’s Senate contest, incumbent Sen. Mark Udall, D-Colo., leads GOP challenger Cory Gardner by seven points among registered voters, 48 to 41 percent; another 10 percent are undecided.

In the state’s race for governor, sitting Gov. John Hickenlooper holds a six-point edge over Republican opponent Bob Beauprez, 49 to 43 percent, with 7 percent undecided…

A gender gap is helping the Democratic candidates…In Colorado, Udall is up by 12 points among female voters (50 percent to 38 percent), but he’s running neck and neck with Gardner among men…

Among Latinos – who make up 16 percent of registered voters in the Colorado poll – Udall has a 31-point lead over Gardner, 58 to 27 percent.

And also in Colorado, both Udall (by 50 to 34 percent) and Hickenlooper (by 52 to 35 percent) have the advantage with independent voters.

Here are the details on today's poll of Colorado voters.

The leads for Udall and to a lesser extent Gov. John Hickenlooper among independent voters are particularly dire for Republicans, who are counting on an agitated independent vote breaking their way this November. Udall's massive 31-point lead over Gardner with Latino voters shows Gardner's late attempts to appease this community by changing up his hard-line rhetoric on immigration reform have fallen flat. Combine that with Udall's double-digit lead over Gardner with women voters, and Gardner looks much worse off at this point than most news reporting on this race would suggest.

Hickenlooper has more ground to gain against GOP opponent Bob Beauprez, and that's likely to happen once Beauprez's long record of disqualifying looney-tunes statements since his last run for office in 2006 becomes more widely publicized. Hickenlooper's pundit-certified "tough couple of years politically" colors the narrative about this race, but even here there is good news: 52% of respondents say they are more likely to vote for a candidate who thinks laws governing gun sales should be more strict.

Opposition to the loosening of gun regulations is largely fueled by female voters, who say they are less likely to support a pro-gun rights candidate by 20 percentage points, while men are about equally divided on the question.

Meaning the biggest advantage Colorado Republicans have going into this election…is no advantage at all.

Bottom line: while nobody would suggest these hotly competitive races are over, a few more polls like this could change that. These are not numbers Republicans hoping for victory this November want to see.

Tuesday Open Thread

"On the outskirts of every agony sits some observant fellow who points."

–Virginia Woolf

All Brown People Look Alike To Conservative Blogs

UPDATE: Colorado Peak Politics attempts to correct their post:

CORRECTION: This post has been corrected to reflect that JulieMarie Shepherd is not of Hispanic decent. [Pols emphasis]

Perhaps she is of Hispanic in-"decent?" Kidding aside, there's still no explanation as to why Peak Politics decided Shepherd is "Hispanic" for the purposes of this blog post about "Hispanic" Republican House candidates, so…it must have been the photo?

Not the local conservative blogosphere's finest hour, safe to say.

—–

JulieMarie Shepherd.

JulieMarie Shepherd.

On the conservative blog Colorado Peak Politics today, a fascinating post, and by that we mean incredibly embarrassing, about Colorado Republican legislative candidates who represent the state's "diverse heritage." Here's what they have to say about one JulieMarie Shepherd, running against Rep. John Buckner in Aurora's House District 40:

Two of Colorado’s top targeted legislative races both feature Hispanic GOP candidates [Pols emphasis] and have made the list of “14 in ’14 Races to Watch” put out by the Republican State Leadership Committee:

Beth Martinez Humenik, Colorado Senate District 24

JulieMarie Shepherd, Colorado House District 40

…JulieMarie Shepherd is challenging Democrat Rep. John Buckner for his Aurora-based seat.  She has already distinguished herself in the community and is an at-large member of the Aurora Public Schools Board of Education.  Shepherd is young, energetic and hungry to make a difference.

Just one problem: Shepherd isn't Hispanic. Wrong continent, in fact:

While she was born in Calcutta, India, [Pols emphasis] Shepherd considers herself an "almost" native of Aurora. As an infant, she was adopted and came to live in Aurora with her mom, a retired United States Army Officer.

As you can see from the photo above, Ms. Shepherd is brown. Apparently, to our local conservative bloggers, brown skin tone is enough to be considered "Hispanic," even though there are in fact many ethnicities where brown skin tone is commonplace. For example, people from India.

If anyone would like to explain to us how this isn't every bit as bad as it looks, we're all ears…

Udall Outraises Gardner in First Full Head-to-Head Quarter

Mark Udall, Cory Gardner.

Mark Udall, Cory Gardner.

As Fox 31's Eli Stokols reports:

Colorado Democratic Sen. Mark Udall raised $3.1 million in the second quarter of the year and now has $5.7 million in cash on hand as the race against Republican challenger Cory Gardner enters a more competitive phase with the election less than four months away.

Udall, who is seeking a second term, has raised more than $13 million overall to support his reelection effort.

Gardner, a congressman from Yuma who didn’t enter the senate race until late February, announced last week that his campaign raised $2.7 million in the year’s second quarter and has $3.4 million cash on hand.

The campaign for Congressman Cory Gardner will try hard to spin these numbers in a favorable manner, but this is bad news for Republicans however you slice it. When Gardner entered the race for Senate a few months ago, national Republicans were crowing that they finally had a (theoretically) likable candidate who could raise lots of campaign cash on his own. Gardner replaced a field of Republican Senate candidates who had been historically inept at raising money, but Gardner nevertheless faced significant expectations that he has not been able to meet.

This was Gardner's first full fundraising quarter — with all the low-hanging fruit still available — and he still failed to outraise incumbent Democratic Sen. Mark Udall. And don't forget: Gardner has been virtually invisible since announcing his candidacy, skipping public appearances to focus on raising money.

None of this means that Gardner may end up being underfunded by November, but it does call into question just how excited national Republican donors are about Gardner's campaign. And as the 2014 election season rumbles on, Republicans will soon have to decide whether to double-down on Gardner financially…or focus any extra resources on states like Montana instead.

Funding Schools With Expanded Gaming?

As the Denver Post's Yesenia Robles reports:

Organizers for an education group collecting signatures to place a question on the ballot asking to expand gaming at the Arapahoe Park horse racetrack say they have collected enough signatures.

According to a news release from the group, Coloradans for Better Schools, the group collected and submitted 136,342 signatures in support of the ballot measure…

That's a healthy pad of signatures over the required 86,000 to get this measure on the November ballot, so it's likely to make it. In addition to allowing casino games at Arapahoe Park, the measure would also expand gaming at racetracks in Pueblo and Mesa Counties. The measure is supported mostly by the owners of the Arapahoe Park track, and opposed by most of the rest of the gaming industry in Colorado due to the competitive pressure it would place on existing gaming towns.

Proponents forecast a return of as much as $100 million per year to K-12 education, though opponents dismiss that amount as unrealistic.

What say you, Polsters? Ordinarily we'd say a one-off gaming measure like this, based on experience, doesn't have much chance of succeeding. The existing gaming towns vigorously defend their monopoly, and spend lavishly to defeat any attempt to expand gaming beyond them. The only thing that raises a question in our minds is the experience of last year's elections, where a tax increase to fund education failed dismally, but taxes on retail marijuana passed overwhelmingly.

So maybe sin is the new model for raising revenue in this state? A poll follows.


Would you expand gaming at Arapahoe Park to fund education?
Total votes: 17
Yes (5 votes, 29%)
No (10 votes, 59%)
Not sure/other (2 votes, 12%)

Post Does Good Job Sorting Out Past Romanoff-Coffman Immigration Positions

(Promoted by Colorado Pols)

Denver Post reporter Kurtis Lee did a good job over the weekend of sorting out the past immigration positions of Rep. Mike Coffman and his Democratic challenger, Andrew Romanoff.

Lee noted that Romanoff pushed compromise immigration legislation through the Colorado legislature in 2006, in order to deflect a more extreme immigration measure from making the Colorado ballot and being locked in the state Constitution.

Lee is among the only journalists who've reported on the context of Romanoff's 2006 immigration legislation, which was opposed by some immigrant advocates.

During the summer of 2006, in his first term as state House speaker, Romanoff faced a critical decision: Have a broadly worded initiative appear on the November ballot that would strip state benefits and even some medical services from those in the country illegally — including children — or strike a legislative compromise.

Lee reported that Romanoff "chose the latter option and staved off a late effort to revive the ballot initiative," which was supported by Coffman.

Among the proponents of the ballot initiative that didn't make it to voters was Coffman, the state treasurer at the time.

Coffman later headed to Congress to represent the then staunchly conservative 6th Congressional District, touting positions as a hardliner on immigration reform and following in the footsteps of his predecessor and a man he called his "hero" — Republican Tom Tancredo

Moving forward in time, Lee again correctly reports that Romanoff supports the comprehensive-immigration-reform bill passed by the U.S. Senate, while Coffman backs, in Lee's words, "piecemeal reforms." Lee does a good job of clarifying that Coffman doesn't just stand for vague "reform" but a piecemeal approach, with the pieces glaringly undefined.

Lee should have noted that just over a year ago, Coffman announced his grand support, in a much-read Denver Post op-ed, for "comprehensive immigration reform." This startled the three people paying attention because it ran counter to Coffman's past positions.

But now Coffman's "comprehensive immigration reform" is out the window, and he wants piecemeal legislation. Coffman has said that a "comprehensive approach doesn’t have to be a comprehensive bill," but if you've ever had a conversation about immigration among people with differing views on the topic, you understand why that's not true. Comprehensive reform allows for compromises to be folded together, with different pet issues included, so everyone can hold a nostril or two and vote yes, like Senators in their compromise by a 68-32 margin.

Lee, who's leaving The Post Wed., probably won't be able to delve into the question of whether piecemeal reform, with only a small piece (citizenship for minors via military service) actually on the table, is more than empty rhetoric, especially with the Senate bill ready to go. But maybe another reporter will pick up the thread.

Hancock Earns Praise on Eve of “State of City” Address

Denver Mayor Michael Hancock

Denver Mayor Michael Hancock will deliver his annual "State of the City" address today — his last "State of the City" before next May's Denver city elections. Hancock has little reason to be concerned that he will even face a serious challenger in his bid for re-election, and the editorial board of the Denver Post helps explain why:

Hancock hasn't been a flashy mayor during his first term, but he's been a steady one who has attended to the nuts and bolts of governance, pushing for efficiencies while paying special attention to neglected neighborhoods such as those along the Interstate 70 corridor.

And no doubt partly because of this record, no one has voiced an intention to challenge him next spring…

We'd be surprised if the mayor announced any major initiatives in Monday's speech, but that isn't necessary. Good governance primarily depends on other things, such as a focus on the city's neighborhoods, connectivity and safety. Nothing flashy, just essential.

What say you, Polsters? What do you think of Mayor Hancock's time in office thus far?

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Local Control Polling: “Terrorism” Enjoys Broad Public Support

Photo courtesy Rep. Jared Polis

Photo courtesy Rep. Jared Polis

As the Denver Post's Lynn Bartels reports, there's a simple reason why the oil and gas industry and their political allies are losing their minds about ballot measures supported by Rep. Jared Polis to increase local control over drilling and hydraulic fracturing.

It looks like they're going to pass.

The poll from Benenson Strategy Group asked voters about two of the proposed ballot measures, both backed by Polis, D-Boulder. Initiative 88 would require drilling rigs to be set back 2,000 feet from homes — four times the current state rule. Initiative 89 would create the so-called Environmental Bill of Rights…

The measure changing existing setback requirements to require any new oil or gas well to be located at least one half mile from the nearest occupied structure initially passed 64 percent to 21 percent, then 56 percent to 35 percent after poll recipients were read a series of negative arguments against the measure — the same arguments Coloradans will hear on the campaign trail.

For those who don't know, Joel Benenson is Barack Obama's lead pollster, and his firm has a reputation for accuracy. And as you can see, this was no leading-questions poll: respondents were subjected to the industry's arguments against the initiatives, and they would still pass.

The other measure includes a provision that if state and local laws conflict the more restrictive law or regulation governs. It initially passed 64 percent to 27 percent, then, after the negative arguments, it passed 52 percent to 34 percent.

As readers know, the rhetoric over these initiatives has really become extreme in recent weeks, with lobbyist Steve Durham bombastically denouncing Polis as a "terrorist" for supporting them. What we're seeing here is the other side of the coin: strong and enduring public support for better protection of local communities from the harmful effects of drilling.

News coverage of these initiatives so far has been unusually one-sided in favor of the oil and gas industry, and overly focused on the failing effort by Gov. John Hickenlooper to broker a "compromise" that would "keep these measures off the ballot." Lost in that narrative, much to the industry's relief, is something critically important: what the people of Colorado want

But they won't be able to ignore the votes this fall.

State Courts Are Defending Public Pension COLA Contracts, (Including Colorado PERA Pension COLA Contracts.)

(Colorado, Montana, Arizona, New Jersey, Illinois, Rhode Island, Washington, California, Oregon.)

Contrary to the public pension contract breach propaganda du jour, state courts are upholding contractual rights to "automatic" public pension COLA benefits.

Lately, a few proponents of taking accrued pension COLA benefits from pensioners have been trying to plant (in politician's heads) the false meme that courts are just fine with breach of public pension COLA contractual obligations.  Everyone is doing it!  Jump on the bandwagon!

Well, I follow developments in U.S. public pension litigation more closely than most, and this claim struck me as ludicrous.  So, I decided to locate and examine the recent pension COLA decisions myself.

Readers should know that a well-oiled, well-funded, corporate public pension "crisis" noise machine exists in the U.S.  The aim of this machine is to divert attention from the $80 billion in corporate welfare that is given away by state and local governments in the U.S., and try to focus attention on public pension unfunded liabilities (underfunded by approximately $40 billion annually.)  If successful, this effort will help protect U.S. corporate welfare.

One such propaganda piece was recently produced by a university research center (receiving corporate financial support from Goldman Sachs no less.)  The paper's author is "surprised" that courts are "upholding" COLA cuts by state legislatures!  Oh my!  But, this "surprise" is unwarranted, as it is contradicted by reality.

In this article I provide excerpts from recent state court decisions in public pension COLA cases, as well as links to the cases.  A brief examination of recent state court decisions will quickly debunk the "courts are just fine with breach of COLA contracts" meme.  This article concludes by providing background information relating to "automatic" and "ad hoc" public pension COLA benefits in the United States.

In 2010, a number of Colorado politicians, state officials and Colorado union officials decided that they wanted to break the COLA contractual obligation in the Colorado PERA pension plan. Yes, Colorado public sector unions have advocated for a breach of the contracts of their retired union "brothers and sisters."  (Remember that retirees no longer pay union dues.  In my view, Colorado public sector unions have sullied the U.S. Labor Movement and exacerbated income inequality in the U.S.)

The hope of the proponents of breaking Colorado PERA public pension COLA contracts was that Colorado courts would not know the difference between "automatic" and "ad hoc" public pension COLAs.  Their hope was that Colorado courts would fail to discover this difference in types of public pension COLA benefits and sanction the desired Colorado PERA pension contract breach.  (Some of those who participated in this scheme to help Colorado governments escape legal debts were Colorado state employees.)

In 2010, these public sector and union officials colluded to break the contracts of Colorado PERA pensioners and attempted to "claw back" accrued Colorado PERA pension COLA benefits (an annual percentage increase in the PERA base benefit that is specified in Colorado law.)  Colorado PERA pensioners are suing the pension administrator, Colorado PERA, and the State of Colorado for the pension contract breach (Justus v. State.)

Public pension administration and jurisprudence are extremely complex subjects.  The proponents of the Colorado PERA pension contract breach have hoped to use this complexity to their advantage.  Statutory public pension COLA provisions may be "ad hoc" COLA benefits that may be legally adjusted by public pension plan sponsors, or "automatic" public pension COLA benefits that are part of public pension contractual obligations.  Any diminishment or impairment of an "automatic" public pension plan COLA benefit by a public pension plan sponsor (such as the State of Colorado or Colorado PERA) is constitutionally impermissible. 

In legal briefs that the proponents of breaking Colorado PERA COLA contractual obligations have filed in the case, Justus v. State, no mention is made of the existence of "ad hoc" and "automatic" public pension COLAs.  Why is that? 

Since 2010, a number of states have attempted to escape statutory "automatic" public pension COLA contractual obligations.  However, state courts are slowly, but surely, learning the distinction between contractual "auto COLAs" and "ad hoc COLAs."  State courts are discovering that "automatic" public pension COLAs are no less a contractual obligation of public pension plan sponsors than are public pension base benefits.  State courts are upholding the Rule of Law in the United States:

COLORADO

Colorado Court of Appeal's Decision in Justus v. State (October 11, 2012): “We consider McPhail and Bills dispositive (indisputably bringing to a conclusion a legal controversy) of whether plaintiffs here have a contractual right to a particular COLA.”

Colorado PERA officials in written testimony to the Joint Budget Committee (December 16, 2009): “The General Assembly cannot decrease the COLA (absent actuarial necessity) because it is part of the contractual obligations that accrue under a pension plan protected under the Colorado Constitution Article II, Section 11 and the United States Constitution Article 1, Section 10 for vested contractual rights.”

http://www.kentlambert.com/Files/PERA_JBC_Hearing_Responses-12-16-2009_Final.pdf

http://saveperacola.files.wordpress.com/2010/01/2012-10-11-judgment-reversed-and-case.pdf

MONTANA

Montana District Court GABA (COLA) taking injunction (December 27, 2013):

"The legislative reduction of the GABA implicates a fundamental constitutional right and must be evaluated under the strict scrutiny standard, 'whereby the government must show that the law is narrowly tailored to serve a compelling government interest.'" 

"Montana law treats public employee pensions as contractual obligations."

http://www.mea-mft.org/Uploads/files/News%20Issues%20Actions/GABAorderTRS.pdf

ARIZONA

Arizona Supreme Court (February 20, 2014 Decision):

"After such vesting, '[the pension] contract cannot be unilaterally modified nor can one party to a contract alter its terms without the assent of the other party.'”

"Smith is inapposite.  Assuming the case was correctly decided, we note that it reflects the general principle that statutory provisions do not create contractual rights.  But statutorily established retirement benefits are an exception to this rule."

"We affirm the decision of the trial court."

http://www.irtaonline.org/documents/ArizonaPensionRuling.pdf

NEW JERSEY

New Jersey Appellate Court (June 26, 2014):

“'It is not the courts' role to run the pension systems,' Reisner wrote. 'Our responsibility is to interpret and apply the constitution in light of the evidence, and we will do so.'"

"Under settled law, for the state to be able to break the COLA contract, it must show at the trial court that the harm to retirees is not 'substantial,' that the government is breaking its agreement for a 'reasonable public purpose,' and that the freeze is related to 'appropriate governmental objectives.'

https://burypensions.files.wordpress.com/2014/06/berg-decision.pdf

ILLINOIS

Illinois Supreme Court Decision (July 3, 2014) in a recent decision finding that retiree health benefits are constitutionally protected as public pension benefits:

“Under settled Illinois law, where there is any question as to legislative intent and the clarity of the language of a pension statute, it must be liberally construed in favor of the rights of the pensioner.”

(Colorado Supreme Court: “As was noted in Endsley v. Public Employees Retirement Association . . . (1974) ambiguities appearing in statutes regulating pension and retirement funds are construed favorably toward the employee.” (Colorado Supreme Court in Taylor v. PERA, November 17, 1975.)

From the dissent of one Illinois Justice hearing the case:

“Stated otherwise, by its plain language, the pension protection clause prohibits legislative action that diminishes or impairs pension benefits by altering the terms of the contract governing the pension.”

http://www.state.il.us/court/Opinions/SupremeCourt/2014/115811.pdf

RHODE ISLAND

Rhode Island Superior Court (April 16, 2014):

"Upon retirement, under Rhode Island law, COLAs and pension benefits are one and the same, providing retirees with a vested interest in the benefits which may not be altered retroactively."

"Because there has been a bargained-for exchange, supported by consideration, this Court finds that there is an enforceable implied-in-fact contract between Plaintiffs and the State."

"Furthermore, our Supreme Court’s jurisprudence supports a finding that Plaintiffs possess protected contractual rights in receiving a pension and a COLA."

"Here, having retired, the Plaintiffs have fully performed.  A valid contract exists between Plaintiffs and the State, entitling Plaintiffs to their pension benefits."

http://www.courts.ri.gov/Courts/SuperiorCourt/DecisionsOrders/decisions/12-3166.pdf

WASHINGTON

Washington Superior Court for Thurston County (November 9, 2012):

"In 2011, the Legislature amended these statutes again and repealed the UCOLA for all active and retired members.  It did not offer a benefit in exchange for terminating the COLA."

"Two cases are dispositive to this Court, Jacoby and Navlet.  In each of those cases, our Supreme Court rejected employers' attempts to reserve the right to unilaterally withdraw vested retirement benefits."

"This Court must follow the binding precedent of Jacoby and Navlet.  Under that precedent, the State is prohibited from reserving the right to unilaterally terminate the UCOLA.  The UCOLA was vested because employees began work based, partially, on the promise of a UCOLA.  Further, the parties agree that the State did not offer any off-setting benefit when it terminated the UCOLA.  The State's actions therefore violated existing law and summary judgment to the employees is warranted as a matter of law."

http://arnoldfoundation.org/sites/default/files/courtDocs/WASHINGTON-WA-Education-Assn-et-al-v-State-Retirement-Systems-et-al-11-09-2012-Opinion.pdf

(My comment: Colorado PERA's former General Counsel and current Executive Director Greg Smith, August 17, 2005, Rocky Mountain News:

“His (Colorado PERA General Counsel Greg Smith) briefing paper said 'there has never been a finding in Colorado that the state has reserved its power to make changes' in PERA's benefit structure.”

"Smith said in his opinion that 'other (non-Colorado) courts have set a high burden to meet the necessity threshold.'"

"The PERA board, however, relying on a legal opinion by General Counsel Greg Smith, thinks benefits cannot be cut for any active PERA member.  That means not just current retirees and workers who are eligible to retire but the brand-new employee who has put less than a year of contributions into the plan."

"Smith argued, however, that there is no precedent for declaring an actuarial emergency unless a pension fund has a serious cash liquidity problem."

http://m.rockymountainnews.com/news/2005/aug/17/span-classdeeplinksredpart-four-the-pera-puzzle/)

CALIFORNIA

California Superior Court, County of Santa Clara (San Jose), (December 19, 2013):

(My comment: Note that the City of San Jose, California, in its efforts to escape public pension COLA contractual obligations, did not try do deny that the public pension COLA benefit is a contractual obligation, as have Colorado politicians.  The City of San Jose argued for the right to be able to suspend the COLAs in an "emergency.")

"A public employee's pension constitutes an element of compensation, and a vested contractual right to pension benefits accrues upon acceptance of employment.  Such a pension right may not be destroyed, once vested, without impairing a contractual obligation of the employing public entity (Betts)."

"Section 1510-A (COLAs) provides that, if the Council adopts a resolution declaring 'a fiscal and service level emergency,' the City may, for a period of up to five years, suspend all or part of the COLA payments due to all retirees."

"The City argues that Valdes supports the notion that vested rights can be suspended in an emergency.  There are several difficulties with this argument."

"In authorizing denial of benefits rather than mere deferral, Section 1510-A exceeds the scope of what Valdes contemplates as potentially allowable.  Accordingly, Section 1510-A is unlawful and invalid."

http://www.sanjoseca.gov/DocumentCenter/View/25332

OREGON

The Oregon COLA-taking legislation was enacted last Fall (2013.)  Under a provision of the bill that broke the pension COLA contract the legal challenge was sent directly to the Oregon Supreme Court.  Just nine years ago the Oregon Supreme Court addressed this question, the contractual nature of public pension COLA benefits (in 2005.)

From the Oregon Supreme Court Decision in Strunk v. PERB (March 8, 2005):

"We therefore conclude that the elimination of annual COLAs from the 'fixed' service retirement allowance, as set out in Oregon Laws 2003, chapter 67, section 10(3), is inconsistent with the legislature's promise set out in ORS 238.360(1) (2001)."

" . . . Strunk and Sartain petitioners are correct in their assertion that the provision of the 2003 PERS legislation that directs PERB to not apply annual COLAs to certain retired members' 'fixed' service retirement allowances breaches the contrary obligation of the PERS contract to do so; that provision also is declared void and of no effect."

http://scholar.google.com/scholar_case?case=3500629816084156134&q=strunk+v.+PERB+pension&hl=en&as_sdt=4006

What about the South Dakota and Minnesota COLA decisions?

The South Dakota and Minnesota legislatures both passed bills in recent years that reduced public pension COLA benefits.  The Defendants in the Colorado COLA case, Justus v. State, cited these state bills as examples of successful state legislation reducing pension COLA benefits.  But, in its 2012 Decision in the case Justus v. State, the Colorado Court of Appeals noted that public pension COLA benefits in South Dakota and Minnesota are in essence "ad hoc" COLAs.

Colorado Court of Appeals: "Lastly, defendants point to two decisions by trial courts in other jurisdictions that have rejected contentions that the legislature’s modification of public employee retirees’ COLA violates the Contract Clause.  Those cases, however, are distinguishable.  In Swanson, the court held that the plaintiffs did not have a contractual right to a specific statutory COLA formula.  But in that case the relevant statute required only the use of certain procedures (tied to the level of the pension fund’s investment returns) to calculate “whether an adjustment is payable,” on an annual basis.  It did not set forth a specific rate of increase.  Here (in Colorado), however, the COLA formula was never tied to the level of PERA funding until after sections 19 and 20 of Senate Bill 10-001 took effect.  Rather, the formula in effect immediately before the bill’s enactment provided for a specific rate: “[t]he cumulative increase applied to benefits paid . . . shall be the total percent derived by multiplying three and one-half percent, compounded annually, times the number of years such benefit has been effective after March 1, 2000.”  In Tice, the court considered a COLA statute providing that “‘all benefits except those depending on the member’s contributions shall be annually increased by the improvement factor.’”  The court concluded that the statute mandated only that a contribution must be increased by an unspecified amount, which the legislature was free to change.  Here, as noted, the prior (Colorado) COLA statute established not merely the payment of a COLA, but the payment of a specified percentage."

http://saveperacola.files.wordpress.com/2010/01/2012-10-11-judgment-reversed-and-case.pdf

NASRA:

"Minnesota is the sole state that protects pensions on the basis of 'promissory estoppel,' that is, public pensions are protected against reduction or other impairment only where an individual can show that he or she justifiably relied on the state’s promise of benefits and was harmed by the change."

http://www.nasra.org/Files/Articles/Buck1404.pdf

Some background materials on public pension COLAs:

NASRA:

"The Governmental Accounting Standards Board (GASB) requires public pension plans to disclose assumptions regarding COLAs, including whether the COLA is automatic or ad hoc, and to include the cost of COLAs in projections of pension benefit payments."

(My comment: Thus, it should be a simple matter to locate a public pension plan's characterization of its statutory COLA benefit.)

http://www.nasra.org/resources/COLA%20IB%20060512.pdf

NASRA:

"According to the Public Fund Survey, approximately three-fourths of pension plans sponsored by states and local governments provide some form of an automatic cost-of-living-adjustment (COLA), i.e., one that does not require specific approval of or action by the plan sponsor (the legislature or city council)."

http://www.nasra.org/cola

In 2001, the actuarial firm, Buck Consultants provided a report to the Legislative Audit Committee of the Colorado General Assembly.  In agreement with a recent statement of Colorado PERA employee Koren Holden, the 2001 Buck Consultants report clearly identifies the Colorado PERA 3.5 percent COLA as “automatic.”  The report also refers to PERA's “guaranteed benefits at retirement,” and the “fixed” COLA, that is “compounded annually for each year of retirement.”  The Buck Consultants report identifies the 3.5% PERA COLA as “automatic,” contrasting the PERA COLA with an “ad hoc” COLA “as approved by Legislature.”

http://www.nctr.org/pdf/coloradodcdbstudy.pdf

Koren Holden, Colorado PERA Project Manager, in Colorado PERA's on-line video series:

"This video describes the methods and assumptions used to calculate the net pension liability . . ."  "The projections should be based on the benefit terms and legal agreements existing as of the pension plan's fiscal year end."  "The benefits should also incorporate the effects of projected . . . automatic postemployment benefit increases such as the annual increase provided by Colorado PERA."  "In addition, ad hoc post-employment benefit changes should be included if they are considered to be essentially automatic. "

https://www.copera.org/pera/employer/gasbvideos.htm#CalcNPL

As we have seen, HB93-1324 struck the former “ad hoc” COLA language from Colorado law. The language stricken in the bill: “(2) Cost of living increases in retirement benefits and survivor benefits shall be made only upon approval by the general assembly."

GASB:

"Questions and Answers Governmental Accounting Standards Board."

"The intent of Statement 25, paragraph 36a, in distinguishing between automatic and ad hoc COLAs, is to REQUIRE (my emphasis) that actuaries include in the scope of their projections any COLAs that are CLEARLY AUTOMATIC (my emphasis) — that is, COLAs embedded in the plan for which there is NO DISCRETION (my emphasis) or condition as to timing or amount.  This criterion is intended to be strictly construed, as a basis for a minimum standard."

http://gasb.org/cs/BlobServer?blobkey=id&blobnocache=true&blobwhere=1175827486295&blobheader=application/pdf&blobcol=urldata&blobtable=MungoBlobs

From the Governmental Accounting Standards Board website:

"New GASB Pension Statements to Bring about Major Improvements in Financial Reporting."

"Measuring the Pension Liability."

"Provisions for automatic cost-of-living adjustments (COLAs) and other automatic benefit changes (which generally are written into the pension benefit terms) will also continue to be included in projections.  On the other hand, ad hoc COLAs and other ad hoc benefit changes—which are made at the discretion of the government—will only be included in projections if they occur with such regularity that they are effectively automatic."

http://gasb.org/cs/ContentServer?site=GASB&c=Document_C&pagename=GASB%2FDocument_C%2FGASBDocumentPage&cid=1176160140567

August 2, 2010, (former Colorado Governor) Ritter Administration Letter to GASB on contractual public pension obligations:

“The criteria suggested as the basis for differentiating these COLAs [automatic] versus ad-hoc COLAs is the statutes that exist as of the date of the employer’s financial statements.”

“The essential difference between an automatic COLA and an ad hoc COLA is the legal requirement; with this core difference there is no way for the two not to be substantively different.  The legal difference in this instance is critical to the determination of whether the government is unable to avoid the surrender of resources to meet the obligation.”

http://www.gasb.org/cs/ContentServer?site=GASB&c=Document_C&pagename=GASB%2FDocument_C%2FGASBDocumentPage&cid=1176157387791)

The National Institute on Retirement Security on “automatic” and “ad hoc” public pension COLAs: “One key design feature of a COLA is whether it is automatic or ad hoc in nature.  An automatic COLA means the retiree’s benefit increases automatically every year by a certain percentage.  An ad hoc COLA is granted at the discretion of the plan sponsor, usually when the fund is in a well-funded position and investment gains have exceeded expectation.”

http://www.nirsonline.org/storage/nirs/documents/Lessons%20Learned/final_june_29_report_lessonsfromwellfundedpublicpensions1.pdf

August 8, 2012, Douglas Greenfield: “The theory behind that is that a pension that has a COLA is the equivalent of a fixed pension . . . that you could just have a higher fixed pension and no COLA . . . and is just a method by which you are providing the benefit.”  Greenfield participated in a panel discussion hosted by the National Conference of State Legislatures. The panel discussion was titled: “How Much Can States Change Existing Retirement Policy?”

http://www.ncsl.org/issues-research/labor/how-much-can-states-change-existing-retirement.aspx

From the Colorado PERA “History of PERA Legislation” memorandum:

HB 00-1458 – "Established 3.5% compounded annual automatic COLA effective March 2001." "Prior to this date, the annual COLA equaled the lower of the actual inflation rate or annual 3.5% cumulative increases since retirement."

(My comment: Note Colorado PERA’s use of the word “automatic” to describe the COLA.)

http://www.colorado.gov/cs/Satellite?blobcol=urldata&blobheader=application%2Fpdf&blobkey=id&blobtable=MungoBlobs&blobwhere=1251603807998&ssbinary=true

From the December 31, 2000 PERA CAFR:

“The Board agreed to support legislation designed to encourage earlier retirement and reduce the state’s costs, provided that this legislation would also change PERA’s post-retirement adjustment to an automatic increase of 3.5 percent compounded annually and increase the contribution to PERA’s Health Care Trust Fund once PERA is fully funded.  Since House Bill 00-1458 included these provisions, the Board supported this bill.”

Keith Brainard, Research Director, National Association of State Retirement Administrators testifies before the a subcommittee of the U.S. House of Representatives (February 14, 2011):

“Only 30-40 years ago, most public plans were financed primarily on a pay-as-you-go basis.”

“Even after the most recent and unprecedented financial downturn, most state and local government pension trusts have plenty of assets to continue to pay promised benefits for years, and values already have rebounded sharply since the market low.” “The percentage of all state and local government spending on pensions has hovered around three percent during the last decade.”

http://judiciary.house.gov/hearings/pdf/Brainard02142011.pdf

NASRA COLA Issue Brief:

http://www.nasra.org/files/Issue%20Briefs/NASRACOLA%20Brief.pdf

Support the Rule of Law in Colorado at saveperacola.com.

Udall Fronts Hobby Lobby Fix While Gardner Says “Make ‘Em Pay”

Mark Udall, Cory Gardner.

Mark Udall, Cory Gardner.

​The Colorado Independent's Tessa Cheek reports from yesterday's press conference on legislation, introduced by Colorado Sen. Mark Udall, to undo last week's Hobby Lobby Supreme Court ruling relieving many corporations of "Obamacare's" obligation to cover contraceptives in their health insurance plans:

Senator Mark Udall joined women’s health advocates today to discuss his newest bill, which would effectively overturn the U.S. Supreme Court’s recent decision allowing “closely held” private companies, specifically craft store Hobby Lobby, to opt-out of employee health coverage that violates their religious beliefs.

“With up to 90 percent of American companies considered ‘closely held,’ the Hobby Lobby decision means that millions of working Americans’ access to crucial health care services may be threatened,” Udall said. “These corporations employ about half of all American workers. That means half of our bosses can now pick and choose which contraception and other health care services work best for our families.”

Udall’s bill, “The Protect Women’s Health from Corporate Interference Act,” clarifies that the law the Supreme Court based their decision on — The Religious Freedom Restoration Act (RFRA) — cannot be used to allow for-profit corporations to limit any legal health care service.

“The men and women who went to work for Hobby Lobby signed up to work at a craft store, not a religious organization,” Udall said. His bill would not impact the coverage exemptions already granted to some non-profit religious organizations like churches.

As the AP reports, Sen. Udall's response to the Hobby Lobby ruling comes in stark contrast to that of his Republican opponent Cory Gardner. Partially in hope of squelching Gardner's longtime support for the Personhood abortion bans, but now viewed in light of the Hobby Lobby ruling, Gardner has called for birth control now available only by prescription to be purchasable over-the-counter. But as Udall notes, that's not a good deal for women compared to what they can get now–and still will, even after Hobby Lobby, from the majority of employers who will choose not to impose their religious views on their employees:

Democratic Sen Mark Udall is skeptical of his challenger's proposal to make birth control pills available over the counter, without a prescription.

Udall on Friday said paying retail prices for the pill could actually increase the cost of contraception. Currently, the Affordable Care Act requires insurance companies to provide cost-free birth control to women. [Pols emphasis]

We assume Gardner doesn't consider cost-free birth control to be a priority, since he wants to repeal the law that makes it possible. But the reason the Affordable Care Act provided for cost-free birth control as guaranteed coverage was to ensure it is available to everyone–even to cash-strapped families who might otherwise make the choice to go without one month to make ends meet. In family planning terms, that can be a very costly choice.

Since neither Gardner's proposal nor Udall's legislation are going anywhere before this year's elections, the choice on display here is for the women of Colorado to decide this November. And despite Gardner's work to, in the words of one Republican consultant, "muddy it up enough to take it away from Udall," there remains a very distinct choice on this issue.