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Stepping On The Gas

Transportation, Housing, PERA In Play Under The Dome

Here we go again.

As the second session of the 71st Colorado General Assembly began on Jan. 10, speculation over what would be among the key issues of the session ended. Typically the speeches of legislative leadership and the Governor highlight the parties’ respective agendas for the session.

They did so again this year, and just as the key issues came into focus, what was not at all clear was if and how those issues would be resolved.

Election year politics and the influence of the allegations of sexual misconduct against four legislators as detailed in my prior columns have visibly impacted legislators’ relationships and behavior. There were calls for the resignation of one accused legislator and threats of a resolution calling for his expulsion. Then came opening day protests against sexual harassment, new legislative policies addressing workplace harassment, and the hiring of an outside investigator, who starts this month. All of these set the session’s tone.

And there’s the increase in the budget of anywhere from $196 million to $340 million due to growth, the changed treatment in the hospital provider fee, and changes in the recently passed federal bill have altered approaches to problems.

On a side note, keep an eye on Republican efforts to change the budget writing process to weaken the role of the Joint Budget Committee. The current budget approval system has been around for decades, and puts enormous power in the hands of six legislators who comprise the Joint Budget Committee. There are pros and cons to changing the current system.

When I served in the legislature I was honored to serve on the JBC and in my view, the current system of requiring consensus forces tough decisions to be made by both parties. It is no coincidence that every year Colorado has a balanced budget passed on time. That does not and has not occurred in every state.

Split on transportation

Transportation funding was on the lips of any who spoke publicly on key issues. However the divergent and competing approaches raise real doubt about the likelihood of compromise.

The Governor seemed to hint at an increase in the state’s gas tax – a tax that many view as regressive and most impacting those on the lower ends of the income scale. Speaker Crisanta Duran (D-Denver) voiced support of a statewide general sales tax increase – again, viewed as a regressive approach. Both approaches by the Governor and the Speaker appear to involve pledging revenues to support bonding for long-term funding.

In contrast, Republican Senate President Kevin Grantham, who originally joined with the Speaker and proposed referring a measure to the public for a sales tax increase solution last session, now appears to prefer pledging $300 million of existing state revenues as a funding source. Fellow Republicans Sen. Chris Holbert and Rep. Patrick Neville joined Grantham to vocally share opposition to any tax increase, insisting instead that existing state revenues be the funding source.

In addition to the split on how to fund transportation, a substantive rift exists on what to fund. Generally speaking, Republicans favor only highway and road construction with an emphasis on Northern Colorado and other rural areas of the state. Democrats have insisted that mass transit and other alternatives will have to be part of any successful solution.

Finally, segments of the business community are discussing an initiated measure to the public promoting a tax increase to support bonding for road construction, emphasizing Interstate 70 west.

In my view the Building and Construction Trade Unions who do most of the work on transportation projects and the large contractors, along with women and minority owned construction firms, need to set aside their differences and weigh in and work together with legislators on a solution. New road and mass transit construction will create thousands of new jobs and solve a problem that could derail our State’s economy if left unsolved.

Neighboring states have better transportation infrastructure than we do, and that is a long-term recipe for disaster.

Roofs over our head

Affordable housing was prominent in the opening day speech of the Speaker, as well as the Governor’s State of the State. Although the Governor conveyed an interest in expanding the affordable housing tax credit program, few other specific solutions were offered.

Affordable housing is an issue throughout the state that is not keeping pace with the rate of growth and development and is more particularly acute in rural Colorado. Look for this issue to gain attention as the session moves forward and for the introduction of a variety of innovative approaches to address the problem.

Paying for PERA

Funding support for the Public Employees Retirement Association (PERA), the approximately $44 billion retirement plan for state employees, judges and K-12 teachers, was prominent in the State of the State speech as well as in the opening remarks of the Speaker and the President.

After years of the legislature failing to fully fund the actuarial requirements of PERA, the fund is believed to be only 58 percent funded resulting in a reported $23 billion shortfall. I think the situation is further exacerbated partly due to changes in federal law as a result of the financial crisis of 2008 and 2009 and the resulting banking and insurance abuses revealed.

As federal laws changed the measures for determining the adequacy of funding of retirement plans, more government retirement plans including PERA, have been determined to be underfunded. Unlike the 2010 legislative session where a bipartisan solution was agreed to before opening day, no such compromise exists now.

The PERA board has proposed a solution that has drawn criticism from the Governor, who has proposed his own fix. Democratic legislators have other proposals. In addition, state Treasurer Walker Stapleton, who serves on the PERA board, is seeking a legislative sponsor for his solution of reduced cost of living benefits, higher employee contributions, and modifying retiree benefits without using taxpayer revenues to increase the State’s employer contributions.

All of those involved in the reform effort have a unique interest as they are all PERA members and/or contributors by virtue of being state employees.     

Standing at the intersection

The intersection of statewide and local issues can be viewed through the prism of the debate over transportation funding and affordable housing. That intersection, at least in Denver, came into full effect with the community meeting organized by activists from Shorter AME Church and DenverCan (“Community Action Network”).

Driven by Colorado and Denver’s explosive growth and ignited by the recent INK Coffee controversy where the shop proclaimed it was “Happily gentrifying the neighborhood since 2004,” nearly 1,000 residents, with a few elected officials, convened in early January to discuss the impacts growth and development are having on Denver’s neighborhoods.

A common theme was that Denver city government is (intentionally?) allowing developers to proceed unchecked at the expense of communities and their long-term residents. The sense that development was happening to communities and residents and not with them was continually repeated. Participants were resigned to the fact that growth and gentrification were not likely to be stopped, but were resolute in their focus to combat those forces and require that they be respectful of residents, with or without City government participation.

The visible showing of state representatives and senators at the gathering gave participants the hope that some solutions might be forthcoming from the General Assembly. Despite the enthusiasm and the seemingly supportive legislators in attendance it is doubtful that anything will happen on this important issue for two reasons:

1) The Community itself must set forth solutions that have a broad consensus of support, and 2) That proposal must have widespread support to overcome the likely pushback from the Homebuilders Association and other lobbying groups.

Keep watching. This is shaping up to be a wild and wooly session.

Penfield W. Tate III is an attorney with Kutak Rock and serves on a number of nonprofit boards. He represented Park Hill in the Colorado House of Representatives from 1997 to 2000, and in the State Senate from 2001 to February 2003, when he resigned from the Senate to run for Mayor of Denver. Penfield’s adult daughter was born and raised in Park Hill, and he and his wife Paulette remain in the neighborhood.


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