Where’d the money go? Stapleton wants to know
April 26, 2014
EAGLE — Colorado’s public pension fund has created a $26 billion liability. State Treasurer Walker Stapleton, one of the fund’s 15 board members, wants to know how and asked for some information.
The Public Employees Retirement Association told him he couldn’t have it, claiming it’s confidential. So far, PERA has won two rulings, both from judges who are PERA members, Stapleton said.
It’s now being considered by Colorado’s Supreme Court.
Gov. John Hickenlooper and state Attorney General John Suthers are squarely in Stapleton’s camp. The Democratic governor filed a brief asking the Colorado Supreme Court to hear the Republican state treasurer’s lawsuit after the Court of Appeals ruled against Stapleton in August.
Hickenlooper said refusing “transparent access” to information about the pension system to a board member sets a “chilling precedent.”
Stapleton wants non-identifying information about the top 20 percent of the pension’s beneficiaries and their annual retirement benefit. He argues the information will help him to assess the health of the state pension’s program and how to keep it solvent.
The pension board that manages the Public Employees Retirement Association says the information is confidential.
Finance over philosophy
Stapleton, an active Rotarian in Denver, stopped in Eagle on Wednesday to chat with members of the Western Eagle Valley Rotary Club. He’s up for re-election and faces Democrat Betsy Markey in the November election.
His great-grandfather, Benjamin Stapleton, was Denver’s mayor for five terms and an ardent Democrat, so he grew up knowing how to work across the aisle, he said.
The state and nation are at a fiscal crossroads, Stapleton said.
“The fiscal and economic issues states are dealing with will determine the future we want to have,” he told the room of Rotarians.
He said it’s easy for those who rattle around political circles to be distracted by philosophy. Fiscal policy is more important.
“You can come to agreement with people who don’t see things the same way because it’s a math problem,” Stapleton said.
For example, when Stapleton refinanced the state’s debt, it reduced the cost to Colorado businesses by about $150 a head.
“It’s the most important legislation that’s been passed recently, but almost no one has heard of it,” he said.
When he buttonholed a reporter to talk about it, he says the reporter told him it was too complicated for their readers. So Stapleton took his show on the road, talking to everyone from civic groups to Boy Scout troops.
“They get it just fine,” Stapleton said.
He helped create a policy that requires Colorado’s 18 state agencies to communicate with each other about, well … pretty much everything. Bids, contracts, contractors — everything.
For example, previously, Colorado required no oversight for nepotism for conflict of interest, and plenty existed.
The state had no way to track the debt it had issued, he said, so as long as he was fixing things, he changed that as well.
He and some of his staff were in a conversation with Moody’s, the credit rating service, when Moody’s asked how much debt Colorado had issued. No one knew, and what’s worse no one had any way of knowing, Stapleton said.
“They had no tracking mechanism. Now if debt is issued, it’s issued out of the treasurer’s office and we can track it,” Stapleton said. “It improves out accountability and transparency. For me this is an example for common sense fiscal policy.”
Pensions and education funding
Stapleton became the de facto opposition leader to Amendment 66, the billion dollar education package that Stapleton called “the largest tax increase proposal in Colorado history.”
His opposition centered on where the money would go and that there was nothing in the measure to keep the money from being used to backfill Colorado’s “unfunded and unsustainable public retirement system.”
Amendment 66 failed by 32 points.
“If something fails by 32 points and it was backed by a $12 million campaign, it’s more than opposition from one party or organization,” Stapleton said.
He said it told him that Colorado is, at its core, a fiscally responsible state.
Two days after Amendment 66 failed, the pension fund board voted 8-7 to reduce their return-on-investment projections from 8 percent to 7.5 percent.
“It assumes an outlook of lollipops and rainbows for the next 30 years, and that lets them off the hook for funding it sufficiently,” Stapleton said.
The game that’s played is to keep that rate of return artificially as high as possible. That means it’s not being funded properly at the local level. That’s trouble down the road, and that road’s not long, Stapleton said.
“When the debt builds up, it becomes a crushing debt for the local governments and school districts. The public pension burdens are bankrupting school districts and cities,” Stapleton said. “It’s not possible to have education reform without commensurate pension reform.”
That $26 billion liability is about the same as the state’s entire annual budget.
Staff Writer Randy Wyrick can be reached at 970-748-2935 or rwyrick@vail daily.com.