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FISCAL – Issue Papers

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  • FISCAL – Issue Papers

  • How to Save a Billion Dollars in Other Post-Employment Benefit Costs0

    • August 18, 2010

    This study focuses on the retiree health plan administered by the Colorado Public Employees’ Retirement Association (PERA). The PERA Health Care Program is a cost sharing multiple-employer plan. The “employers” in this context are the various governments that hire most public employees, such as public school teachers, fire fighters, police officers and state employees. Under this program, PERA subsidizes a portion of the premium for health care coverage, and the retiree pays any remaining amount of that premium. The Colorado legislature created the Health Care Trust Fund in 1999 to provide state subsidies to the Health Care Program.

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  • Levels of Long-Term Debt Within Colorado’s Local Government0

    • July 5, 2010

    The world is seeing levels of unprecedented government debt. However, the media focuses mostly on debt levels of national and state governments. For the most part, the general public has ignored the subject of local government debt. The root cause of this ignorance lies in the difficulty associated with uncovering information on local debt.

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  • PERA Falls Off A Cliff0

    • August 22, 2009

    The Public Employees Retirement System (PERA) in Colorado is experiencing a funding crisis. The recent collapse of financial markets has resulted in a significant decrease in the value of the PERA portfolio. But the funding crisis in PERA is not just the result of problems in financial markets.

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  • A Fiscal Roadmap for Colorado0

    • July 3, 2009

    Colorado appears to be at a crossroads similar to that in California in the late 1980s. At that point California was a dynamic growing economy. That prosperity reflected a fiscal constitution that kept the growth of government in line with the growth of the private economy. California’s GANN Amendment, which was a precursor of the TABOR Amendment in Colorado, limited the growth of state revenue and spending to the sum of inflation and population growth. In the late 1980s, under pressure from the education employee lobby, the California legislature abandoned the GANN Amendment, and the rest is history.

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  • An Academic Arms Race: The catastrophic rise of taxpayer-funded salaries at the University of Colorado and its peer institutions0

    • May 3, 2009

    In the last three years alone, CU’s budget has ballooned from $1.9 billion to $2.4 billion, with increases to salaries eating up a big part of the total. Between 2006 and 2009, CU’s three chancellors received a collective annual taxpayer-funded raise of more than $500,000.9 And even in the aftermath of the cuts recently announced by Benson, Denver Chancellor Roy Wilson could still make over $700,000 this year.

    Students, meanwhile, have been forced to foot the bill through skyrocketing tuition increases. CU-Boulder undergraduates saw an average tuition increase of 9.3 percent this year; in Denver, the average was 8.5 percent; and in Colorado Springs, 7.5 percent. These increases followed 2007-2008 hikes ranging from 7 percent at CU-Colorado Springs and 14.6 at CU-Boulder.

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  • What Now For PERA: Déjà Vu All Over Again?0

    • March 1, 2009

    Colorado’s Public Employee Retirement Association (PERA) is experiencing a financial crisis. The current financial crisis has resulted in a significant decrease in the value of PERA’s portfolio. But the financial crisis in PERA is not just the result of the current financial crisis. PERA’s defined benefit pension plan is fundamentally flawed; the problems in the plan have emerged over several decades. While the current financial crisis has exacerbated these problems, PERA is facing a long-run deterioration in its financial condition.

    The legislature has enacted several reforms over the past decade to address PERA’s financial problems. These reforms have included changes in benefits, increased contribution rates, and administrative changes. Unfortunately, these reforms have failed to address the fundamental flaw in PERA’s defined benefit plan.

    This Issue Paper explores the financial crisis in PERA. Different measures of the magnitude of the crisis are examined, and the flaws in PERA’s defined benefit plan are analyzed. The failed legislative reforms of PERA are critically evaluated. The Issue Paper concludes that the legislature should consider declaring a financial emergency and enacting the fundamental reforms needed to solve PERA’s financial crisis. Other states have successfully reformed their own state employee pension plans by replacing a defined benefit plan with a defined contribution plan.

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