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September 02, 2014 08:27 AM UTC

Facts Undercut Walker Stapleton (Again)

  • 13 Comments
  • by: Colorado Pols
Walker Stapleton.
State Treasurer Walker Stapleton.

As the Grand Junction Sentinel’s Charles Ashby reports, Treasurer Walker Stapleton’s favorite axe to grind, the estimated rate of return for the state’s Public Employee Retirement Association fund, has once again failed to fulfill his dire predictions. Last week, Stapleton lost big at the Colorado Supreme Court, when the court refused to hear his appeal to gain access to confidential PERA data. Stapleton’s campaign to “reform” PERA, while complaining loudly about the fund’s supposed weakness, has been his most visible policy as state treasurer.

Well, as Ashby reported yesterday…it’s a bunch of BS.

A state audit of the Colorado Public Employee Retirement Association, which holds and manages pensions for just about every state and local government employee in Colorado, has “no significant deficiencies or material weaknesses.”

…Along with the audit, PERA’s actuaries also reported last week that the pension fund will become 100 percent funded in 34 years, Smith said. While the ideal solvency level is aimed at 30 years, the pension system doesn’t have far to go to get to where it needs to be fully funded, he said.

Smith credited much of the pension’s good health on reforms made by the Colorado Legislature in 2010. That new law, SB1, reduced retirement benefits for new government hires, reduced automatic cost-of-living increases for existing retirees and increased contributions to the fund by employers over seven years…

Though it now has a projected 7.5 percent return rate, which the pension lowered from 8 percent, over the past 30 years its investments have returned more than that — 9.5 percent on average, he said. [Pols emphasis]

The fact is, Treasurer Stapleton’s doom and gloom assessments of PERA’s outlook, segueing into the usual political arguments for “doing something” about the “lavish benefits” PERA pensioners receive, have totally failed the test of basic accuracy. Even after the 2010 SB-1 reforms significantly increased employee obligations, not to mention the lowering of the projected rate of return for PERA investment to 7.5% last year, Stapleton has continued to find a ready (if ignorant) audience for his message on PERA with partisan Republicans.

As we discussed last week, Stapleton has missed a large number of PERA Board meetings, going back years–all the while pursuing his now-failed lawsuit, and arguing that PERA’s “irresponsibility” was exposing Colorado taxpayers to massive risk. The full facts of Stapleton’s campaign against PERA make the whole business just laughable. Even if you’re with Stapleton on “reforming” PERA, he’s done a terrible job making the case. For us, having missed so many PERA board meetings while grandstanding on the issue for years destroys Stapleton’s credibility. For everyone else, there’s the increasingly undeniable fact that Stapleton is just plain wrong about PERA.

“Without being confrontational with the treasurer, we like to talk about the numbers, [Pols emphasis] and are focused on the numbers, and the numbers indicate to us that we don’t have a current crisis. Every indication is we’ll be able to meet our obligations and eventually we’ll return to fully funded status.”

Back in 2010, when Stapleton campaigned for treasurer warning of a coming “hyperinflationary environment” and calling for the state to buy gold Glenn Beck style to ward off disaster, we marveled a little that this silly man was actually poised to defeat a competent and trustworthy administrator like then-Treasurer Cary Kennedy. But it was a wave year, and things happen down the ticket in such elections that have nothing to do with the greater good.

There was no “hyperinflationary environment” after 2010, but Stapleton has proven no less silly.

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13 thoughts on “Facts Undercut Walker Stapleton (Again)”

  1. Former Treasurer Cary Kennedy lost to Walker Stapleton in 2010 at least partly due to the fact that as a member of the PERA Board she voted to recommend the breaking of PERA retiree contracts which later was voted on by the legislature as SB10-1. 

  2. I think there can always be a worry about the solvency of a defined benefit plan based on a ton of outside factors that have nothing to do with Ms. Kennedy, or Mr. Stapleton's own personal opinion on any given day.  If we have a mild "10-15%" market correction that lasts a couple years, what will that do to the estimated rate of return?  I think this is too dumbed down to be fully accurate.  

    I'm in no way suggesting Mr. Stapleton has been the perfect Treasurer, but neither was Kennedy, Hillman, Coffman, Owens, Romer, etc, etc.

    Why is Ms. Markey going to be a better Treasurer?  She voted for every possible spending bill while in Congress (for 2 years nonetheless).  TARP, Cash for Clunkers, etc.  I don't trust her investment judgment. And isn't that what matters?  Not the R or D by their name, but by the job they will do? 

    How will Ms. Markey make the Treasurer's office "more transparent"? Let's get out of talking points and actually hear the candidates talk the facts!  

    I think we should have a ColoradoPols sponsored debate! (I know most R's won't come, but it could be a lot of fun, and could gain a lot of earned media for the site, if done fairly)!

     

      1. No this is a genius idea!  Hell I would even help organize the event!  Have 1 moderator designated by each organization, get questions submitted from each website, still leave them anonymous, and have one HELL OF A GOOD TIME!

    2. I like the idea of a debate.  Why Markey would be a better treasurer:

      1) She is not a "one-trick pony" like Stapleton. She seems to understand that there is more to the Treasurer's job than fuming and fussing about PERA rates of return. She has a true commitment to retiree's security, whether through PERA or SSI.

      2) Markey has a great resume– Besides running two successful businesses, she worked as a Budget Analyst for the US Treasury.

      3) As far as transparency and why there would be more of it from the Treasurer's  office if she is elected, she talks about transparency everywhere she goes, as she did in Pueblo recently. Quoting from Pompia's Chieftain article on  Markey's plans for transparency:

      Markey said it’s essential for the state treasurer’s website to be updated regularly so that taxpayers can see where their dollars are being spent. Another measure to increase transparency is issuance of a State Taxpayer Accountability Report (STAR), which the treasurer’s office hasn’t released since early 2011.

      4) On investment sense, you may disagree with TARP and Cash for Clunkers, but they were great investments, earning  an 8.2%  25.2 billion return (TARP) and $2 Billion plus a reduction in CO2 (~8-28 million tons)  with the Cash for Clunkers program.

    1. Huh? If the fund has averaged more than that for the last 30 years, why is that too high?

      The story quotes the PERA guy saying 30 years average. Same question?

    2. Let's say the parameters were reduced to 5% and 5 years, how would this be accomplished?  There are only a few choices … lower current retiree benefit, lower future benefit, increase employer contribution, take out a POB (pension obligation bond).  But Dave, I suspect your comment to totally tongue in cheek …

      1. Heck, we can market the next PERA reform package as the five 5's… 5-5-5-5-5, as in:

        5% expected return (in 5 years)

        5% reduction to current retiree benefit

        5% increase in contribution by current employees

        5% increase in contribution by employees

        5 billion dollar POB.

        Shared sacrifice, intergenerational equity!

         

  5. The premise is that its always broken, so they have to come in and "fix" it.  Like medicare or social security; lets fix it by destroying it or privatizing it out to our country club friends.

    I don't for a minute trust this guy to do anything constructive with PERA. The best thing he could do is just keep his fucking hands off, but he's just gotta reach for that huge cookie jar.

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