Flurry At The 11th Hour

Sine Die Legislature 2018, Hello Silly Season

Not surprisingly, two of the most significant issues of the legislative session were resolved as the midnight deadline on May 9, Sine Die, approached. Working late into the night on the floor, in caucuses, and in conference committees, legislators provided additional support for PERA the day after they reached a compromise on transportation funding.

First, let’s talk transportation.

In Senate Bill 18-001 (SB1), the legislature approved a deal out of conference committee designed to devote more money for the transportation projects. SB1 is terribly complex in its language. It is crafted based on the uncertainty of the 2018 election and what voters may do at the ballet in November. As a result, let’s just focus on the major points of compromise. And my apologies in advance for the acronyms.

As passed, SB1 provides $695 million from the state General Fund for transportation funding in Fiscal Year 2018-19, which begins on July 1. Basically, those dollars are to be allocated $346.5 million to the state highway fund (SHF) for highway projects; $74.25 million to the users tax fund (HUTF) for county and municipal transportation projects; and, $74.25 to the new Multimodal Transportation Options Fund.

The Multimodal fund is created to finance and build fixed-route and on-demand transit, projects enabled by new technology, studies, and bicycle or pedestrian projects. For those dollars, 85 percent will go toward local projects, and 15 percent will be for state projects.

In FY 2019-20 (beginning July 1, 2019) the numbers are $150 million from the General Fund to the SHF to finance $105 million of state highway projects, $22.5 million to the HUTF for county and municipal road projects, and $22.5 million to the Multimodal fund.

Forks in the road

Here is where it gets complicated. The legislature passed SB1 assuming that there will be at least two initiated transportation measures on the November ballot. Both measures will provide new authorization for the issuance of bonds to fund highway improvements. As of now, the source of the money to repay the bonds is the major difference.

Also, I reference new authorization because last year the legislature approved a bonding program for transportation projects, but that authorization is modified by SB1.

One initiated measure is expected to authorize up to $3.5 billion in bonds with a total repayment cost not to exceed $5.2 billion over a 20-year period with the source of the repayment of the borrowing to come from existing funds as appropriated annually by the legislature (no new taxes). If passed, SB1 eliminates three of the four years of borrowing authorized in 2017.

The second anticipated measure will ask voters to approve a 20-year tax increase, currently expected to be a sales tax increase in a range of .5 to 1 percent, and authorize bonding up to $5 billion with a total repayment cost of $7.8 billion over the 20-year period (new taxes). The proceeds from the new taxes will pay the bonds and may also be spent to fund state, county, municipal and multimodal projects. If approved, SB1 maintains the 2017 bonding authorization.

If no funding proposal is approved by voters in 2018, SB1 refers a measure to voters for consideration next year. The 2019 measure will authorize up to $2.337 billion in bonding with a maximum repayment cost of $3.250 billion to be paid from existing revenues. If passed, SB1 eliminates three of the four years of bonding approved in 2017. And if all measures fail in 2018 and 2019, the approved 2017 bonding remains in place.

Oh boy, and these were just the high points.

Details are in the PERA

In the waning hours of the session, the legislature also finally addressed PERA. As part of the budget conversation, lawmakers had already appropriated an additional $225 million for PERA this fiscal year.

In addition, Senate Bill 200 (“SB200”) provided further adjustments to the PERA system. Employee contributions will be phased in, to include an additional 2 percent of salary over the next two years. Retirees will lose cost of living raises for two years but after that, annual raises will be capped at 1.5 percent yearly. State employers and school districts will make higher contributions as the employers’ share moving forward.

The retirement age is changed from 60 for state workers and 58 for teachers to 64 in the new bill. Also, the much-discussed option for a defined contribution or 401(k) plan will be limited to local government employees and other state employees but not school district employees – who happen to make up the largest group of PERA participants.

Gearing up for the June 26 Primary

With the end of the session comes the focus on the upcoming primary election.

A number of primaries will be waged on June 26 on both sides of the political aisle. Candidates for the Democratic nominee for governor are former State Sen. Mike Johnston, former state Treasurer Cary Kennedy, Lt. Gov. Donna Lynne and current U.S. Congressman Jared Polis.

The Republican lineup includes former Parker Mayor Greg Lopez, former legislator Victor Mitchell, businessman Doug Robinson, and state Treasurer Walker Stapleton. All of the candidates except Lopez and Stapleton are currently running TV ads.

The winners from each party will face off in the general election in November. As we approach the primary, expect to see an increase in the number of ads. Expect the candidates to sharpen the conversation about their differences and relative merits.

Counting every vote

For the first time in Colorado, this year unaffiliated voters can participate in the primary election, simply by designating which party they wish to participate in – Democratic or Republican.

With the near death of the Denver Post, it has been difficult to find much daily news coverage on this primary election, except on social media and online. Similarly, not much polling has been done, making it difficult to determine where any of the candidates stand.

But it is uncertain whether any polling at this point would be accurate or reveal where voters are headed. Many have speculated that it will take two or three election cycles before unaffiliated voters actually participate in primaries.

Given the national and local political climate, I am not certain that I share that view. We may see an uptick in activity in unaffiliated voters, but not likely a mad rush to the primary polls. With the negative press and publicity surrounding national and local officials, and the recently concluded legislative session with expulsions and allegations of harassing behavior taking up the public’s attention, the majority of voters simply haven’t focused on June 26.

Look for canvassers walking through your neighborhood dropping off literature and soliciting your vote. Please remember that every vote counts. Happy summer.

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.