April 01, 2013 02:49 PM UTC

The Public Pension Rant Heard from Frog Jump to Punkin Center.

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• by: PolDancer

A few days ago former (appointed) Colorado Treasurer and farmer Mark Hillman raised a ruckus in the Denver Post about those darn Colorado PERA public pensions.  Hillman, rest assured, Colorado PERA retirees don’t take kindly to loose talk about breachin’ their contracts!

As we have seen, the Colorado PERA public pension system was underfunded and mismanaged by former Colorado Governor Bill Owens, yet Hillman (appointed by Bill Owens) apparently believes that Colorado PERA retirees should bear the financial burden of this mismanagement.  In his “guest commentary,” Hillman actually tries to use guilt as a mechanism to persuade Colorado PERA pensioners to relinquish their contractual public pension rights.  He fails to recognize that spending to meet the government’s contractual obligations and spending for discretionary public purposes are different animals altogether.  It’s one thing to cut a discretionary public program, quite another to break state contracts.

Hillman, get this straight in your head . . . there is a world of difference between a governmental appropriation to meet a contractual obligation, and a discretionary governmental expenditure . . . for example, a farm subsidy.

For Mark Hillman’s edification, let’s explore the distinction between mandatory and discretionary public sector expenditures.  Later in this article, we’ll have a look at Colorado PERA’s contractual pension obligations, but first let’s delve into the nature of discretionary public expenditures.  The U.S. Farm Subsidy program (“agriwelfare”) serves this purpose well.

According to Hillman, the threat of government confiscation of property allows the federal government to give farm subsidies:

Mark Hillman, September 2, 2007 Pueblo Chieftain:

“Transfer payments – like welfare, Social Security and farm subsidies – couldn't occur if government didn't have the power to confiscate our property or assets if we refused to pay taxes, even for causes we would not support voluntarily.”

Hillman praises Santorum’s efforts to “reform” farm subsidies:

“He’s (Santorum) been a courageous leader in reforming entitlements, including welfare and farm subsidies.”

http://www.markhillman.com/2012/02/10/santorums-surprise/

So, it appears that the Hillman hackles can be easily stood up over this matter of farm subsidies.  Yet, one website reports that farm subsidies received by a Mark Hillman of Burlington, Colorado approach one-half million dollars.  From the EWG website:

“EWG Farm Subsidy Database – Subsidy Total 1995-2011”

“135    Mark Hillman     Burlington, CO 80807       $463,616.75”

http://farm.ewg.org/addrsearch.php?c=1&city=burlington&stab=CO&page=4

For perspective on this matter of farm subsidies, let’s turn to sober journalist Dave Barry:

“The purpose of the Farm Security act is to provide farmers with ‘price stability.’ What do we mean by ‘price stability?’ We mean: your money. You have already been very generous about this: Last year alone, you gave more than $20 billion worth of price stability to farmers. Since 1996, you've given more than a million dollars apiece to more than 1,000 lucky recipients, many of which are actually big agribusinesses.”  “Perhaps you are asking yourself: ‘Wait a minute! Isn't this kind of like, I don't know . . . welfare?”

“No, it is not. Welfare is when the government gives money to people who produce nothing. Whereas the farm-money recipients produce something that is critical to our nation: votes. Powerful congresspersons from both parties, as well as President Bush, believe that if they dump enough of your money on farm states, the farm states will re-elect them, thus enabling them to continue the vital work of dumping your money on the farm states. So as we see, it's not welfare at all! It's bribery.”

http://news.google.com/newspapers?nid=861&dat=20020623&id=ODNSAAAAIBAJ&sjid=HjYNAAAAIBAJ&pg=7027,5523128

From the EWG:

“The program has been maintained beyond its intended lifetime and now is a federal entitlement program for farmers that costs the government about $5 billion per year.”

"The Tea Party swept into the 112th Congress with promises of cutting government spending. But according to a report out today, at least five lawmakers with Tea Party connections have been longtime recipients of federal agricultural subsidies. ‘There's nothing too surprising about hypocrisy in Washington,’ Ken Cook, president of Environmental Working Group, told ABC News. ‘This particular group, you not only have to look at the hypocrisy but you need to watch your wallet.’"

“The biggest recipient was Rep. Stephen Fincher, a Republican from Frog Jump, Tenn. While the self-described Tea Party patriot lists his occupation as ‘farmer’ and ‘gospel singer’ in the Congressional Directory, he doesn't mention that his family has received more than $3 million in farm subsidies from 1995 to 2009, according to the Environmental Working Group."

http://farm.ewg.org/subsidyprimer.php

Hillman:

“TEA parties ignite conservative resurgence.”

http://www.markhillman.com/2010/10/03/tea-parties-ignite-conservative-resurgence/

It appears that the agriwelfare flows freely across Kit Carson County, I reckon it flows all the way to yonder Punkin Center:

“USDA subsidies for farms in Kit Carson County, Colorado totaled $557,637,000 from 1995 through 2011.”

http://farm.ewg.org/regionsummary.php?fips=08063

“Recipients of Subtotal, Farming Subsidies from farms in Kit Carson County, Colorado totaled $8,511,000 in 2011.”

http://farm.ewg.org/top_recips.php?fips=08063&progcode=totalfarm&page=1&yr=2011

Former Treasurer Hillman has a number of opinions about “discretionary” public expenditures, like those supporting life on the Farm Dole.  But, let’s see what Hillman has to say about mandatory expenditures to meet public sector contractual obligations, for instance, Colorado PERA contractual obligations.  Below I provide a few excerpts from Hillman’s March 29, 2013 “guest commentary” in the Denver Post.  Hillman writes:

“Do PERA pensioners really believe that keeping every last cent of their benefits is worth taking nearly $10,000 away from their grandchildren's classrooms?”

(My comment: Here Hillman uses a “guilt appeal” as a mechanism seeking to eliminate public sector pension debt.  To be thorough, Hillman should also direct this “guilt appeal” toward the elimination of Colorado’s debt to corporations.  Here is my proposal:  Hillman . . . attend the next board meeting of the Colorado Association of Commerce and Industry and make a case for “shared corporate sacrifice” for our public schools.  Ask that Colorado corporations forgive all receivables due from Colorado state and local governments for the next decade or so.  Further, ask that investors in debt issued by Colorado governments take a one-third haircut on the face value of their bonds and that funds made available be transferred to Colorado schools.  [Such a bondholder haircut would approximate the Colorado General Assembly’s proposed taking from Colorado PERA retirees.]  I am confident that your corporate “guilt appeal” will be welcomed by the CACI Board with enthusiasm.

By the way Hillman, Colorado PERA retirees are not concerned about the “last cent” they are owed under their PERA contracts.  Colorado PERA retirees are primarily concerned about state seizure of a third of their contracted PERA retirement benefits.  I ask, does Mark Hillman honestly believe that the State of Colorado should fund its public schools through the breach of state contracts?  Do Colorado taxpayers, who have nearly the lowest per capita state tax burden in the nation, believe that maintaining a paltry level of support for public education in Colorado is worth shortchanging their grandchildren’s classrooms?  Do Colorado’s corporate masters believe that keeping nearly “every last cent” of their corporate earnings is worth shortchanging a grandchild’s classroom?  Well, of course these grandchildren are in private schools.)

Hillman:

“As Colorado lawmakers consider an overhaul of the way the state funds K-12 education, more people are noticing that schools are increasingly forced to pay for the past rather than invest in the future.”

(My comment: Yes Hillman, Colorado PERA-affiliated employers are contractually obligated to pay deferred compensation to Colorado PERA retirees for work completed over the course of their careers.  You know this . . . you have served on the PERA Board.  But Hillman, you present a false choice.  Here we have the Washington Post condemning such tactics:

“It’s time to retire the false choice.  As a rhetorical device, particularly as a political rhetorical device, the false choice has outlived its usefulness, if it ever had any. The phrase has become a trite substitute for serious thinking. It serves too often to obscure rather than to explain.”

http://articles.washingtonpost.com/2011-03-31/opinions/35208590_1_financial-reform-false-choice-false-choice

Colorado taxpayers are free to “invest in the future” of Colorado education at their pleasure.  The fact that Colorado governments must meet debt obligations [incurred in the past] does not preclude Colorado taxpayers from lifting Colorado education from the bottom of the public education support barrel in the future.)

Hillman:

“No other line item is large enough to produce the savings necessary to pay for the tremendous cost of the PERA bailout.”

(My comment: Hillman, paying your debts is not a “bailout.”  Meeting your contractual obligations is not a “bailout.”  For example, if a farmer receives a federal agriwelfare check and uses that check to meet his farm mortgage payment, the farmer is not “bailing out” his mortgage company.)

Hillman:

“Our public schools must take money out of the classroom in order to pay for investment losses and unaffordable promises that have created a $25 billion shortfall in the Public Employees Retirement Association (PERA).”

(My comment: Where to begin?  Shortfall?  Hillman, contracted Colorado PERA benefits will be paid over the next 70 years, these PERA benefits are not due tomorrow.  The term “shortfall” implies that the money is needed immediately.  It is a misnomer.

Allow me to further illustrate my point with another example.  If a farmer has a $25,000 balance on his farm mortgage that is due over the next thirty years, the farmer does not fret about his “shortfall.”  The farmer knows that future revenues (agriwelfare checks?) will permit him to meet obligations as they come due.  The farmer does not holler about his “crisis” to the neighbors.  If he did so, his fellow agriculturists would rightly deem him barking mad.

Further Hillman, why concern yourself with this relatively insignificant “shortfall”?  A much more massive and terrifying “shortfall” threatens.  At this moment, Colorado taxpayers are confronted by a “shortfall” of many hundreds of billions of dollars needed to support Colorado public programs in the coming decades  . . . highway construction, police protection, prisons and education.  Colorado taxpayers have not banked the tax dollars needed to support these Colorado public programs over the next 70 years.  Thus, by your definition, they are confronted by an unbearable burden.  A mere two (to four?) percent of all future Colorado state and local government revenue will be needed to meet Colorado public pension contractual obligations, a commitment perhaps lower than expenditures that would be required to make Social Security contributions for such workers.  The Colorado PERA “shortfall” that worries you is comparatively, peanuts.)

Hillman:

“To continue to promise benefits that are unaffordable and unsustainable is simply unconscionable.”

(My comment: Hillman, if you believe that Colorado PERA benefits are unaffordable and unsustainable why not support prospective, legal public pension reform, like that available to many Colorado counties under SB12-149?  Such prospective pension reform protects your cherished property rights and diminishes future taxpayer obligations.

Unlike “agriwelfare” handouts, Colorado PERA benefits are actually earned . . . they are contracted deferred compensation, earned in the present, payable in the future.  Colorado PERA retirees do not ask for any sort of “handout” from their former employers.  Colorado PERA retirees merely ask that Colorado governments meet their contractual obligations.

I am heartened that, in the past, Hillman has acknowledged the Colorado PERA Board’s long-held position that accrued, contracted public pension benefits, under Colorado law, are inviolate:

Former State Treasurer, and Colorado PERA Board Member Mark Hillman:

“More significantly, PERA abandoned its long-held legal argument that benefits once promised to its members can never be scaled back, no matter how unaffordable they become.  PERA proposes an immediate reduction of cost-of-living adjustments from the current 3.5 percent per year to no more than 2 percent.”

http://www.markhillman.com/2010/01/26/workers-cant-ignore-cost-of-pera-fix/

Hillman:

“Parents must wonder: What can possibly justify penalizing two full generations of students for a mess created long before their lives began?”

(My comment: Mark Hillman expresses concern here for a lack of adequate financial resources for Colorado public schools in the future.

OK, now that we have absorbed that fact we can move on.

Hillman, many Coloradans share your concern.  From the Denver Post:

“Colorado ranks among the stingiest states in the nation in how much it spends to educate its children, according to a government report released Monday.”

http://www.denverpost.com/ci_12926871

If Hillman is actually concerned about the underfunding of public education, why has he not actively supported campaigns to remedy the situation?  If Hillman is actually concerned about the underfunding of public education, why not tackle those ridiculous farm subsidies?  Hillman, the cost of the U.S. agriwelfare mess is simply tacked onto the national debt, displacing public education resources and “penalizing” future generations of students.  These students are accordingly “penalized” although the agriwelfare mess was created “long before their lives began.”  Does the protection of U.S. agriwelfare justify “penalizing” these future generations?)

Hillman:

“If we truly value our future, then we really should ask if it's wise to shortchange schools for the next 35 years in order to pay for past mistakes.”

(My comment: Give Hillman credit here for again acknowledging the historical mismanagement of the Colorado PERA pension.  As you know, I also blame the Colorado PERA Board and legislative mismanagement for the decline in PERA’s funded ratio in the last decade.  Hillman joins me in criticizing Colorado PERA’s administration.  From Friends of PERA:

“Many (Colorado PERA Board) Trustees have daily work experience in areas such as finance and benefits administration.  During 2006, when the change (to PERA Board composition) was being advocated since the Trustees supposedly ‘lacked experience and educational credentials’, the only individual on the 16-member Board who did not have a college degree was the temporary governor-appointed State Treasurer Mark Hillman.”
http://www.friendsofpera.com/facts/index.html)

Now, Hillman is also an ardent supporter of private property rights.  The Colorado Court of Appeals recently cited Lynch on the matter of public pension property rights: “contract rights can constitute property interests protected by the Takings Clause . . . In light of our conclusion that the court erred in that regard, we also reverse the summary judgment on the Takings Clause claim.”

Strangely, Hillman believes that when the Colorado Legislature regulates public smoking, that regulation interferes with private property rights.  Yet, when the Colorado Legislature seizes up to one-third of the value of a contracted public pension benefit, that’s just hunky-dory.

Mark Hillman on the importance of honoring property rights:

“But you don’t need to be a farmer or rancher to understand the importance of private property rights.”

(My comment: Exactly Hillman, Colorado PERA retirees understand the importance of property rights.)

Hillman:

“Colorado’s popular new statewide smoking ban is another example of blatant disregard for property rights.”

Hillman:

“Once you’ve made a piece of property your own, for someone to take it from you by force is nothing less than theft . . .”.

(My comment: Spot on Hillman.)

Hillman:

“Who would do such a thing? Too often, the answer is our government.”

“Yet the legislature put the will of the majority ahead of the rights of property owners.”

(Hillman, I nominate you as Chairman of Save Pera Cola!)

http://www.markhillman.com/2007/08/29/property-rights-or-privileges/

“In elected office, Mark has been a leader in the fight to protect the rights of private property owners against government takings . . .”

http://www.leadershipprogram.org/board-of-directors/the-honorable-mark-hillman

“During his service in the Colorado Senate, Mark focused on protecting the rights of private property owners against government takings . . . “

Bio

Link to the complete Hillman “guest commentary” in the Denver Post:

http://www.denverpost.com/opinion/ci_22893614/pera-bailout-shortchanges-students-teachers

Recently, our former Colorado Senator Hank Brown (a man who collected a $400,000 salary running a charitable organization . . . a man with a $2.8 million federal pension) told us that breaking public pension contracts (perhaps a “non-Hank Brown” public pension) is “Colorado Courage.”  Let’s see a “Colorado courageous” Hank Brown transfer of one-third of Hank Brown’s public pension benefits to Colorado public schools.

Heck, let’s redirect the entirety of Colorado’s farm dole to the support of public education!

Colorado PERA active and retired members, many prominent Coloradans are unfamiliar with the concept of “hypocrisy.”  I blame chronic, inadequate financial support for public education in our state.  But, obviously, the breach of state contracts as a means of funding Colorado public schools is an unconstitutional, immoral proposal advocated by self-serving demagogues.

Help fight for public pension contractual rights and the rule of law in Colorado.  Contribute at saveperacola.com. “Friend” Save Pera Cola on Facebook!