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October 06, 2013 11:24 PM UTC

What Do (a Few) Colorado Democrats Have in Common with Tea Party Anarchists?

  • by: PolDancer

Yes, I know that the very idea of conflating the machinations of the Tea Party with past practices of Democratic members of the Colorado Legislature is repulsive.  But, for a few minutes (for purposes of the following exercise) try to set aside your horror and dispassionately consider the behavioral commonalities noted below.  (This hurts me more than it hurts you.)  And, who knows?  Members of the Colorado Democratic Party might benefit in the future by acknowledging and correcting a few past mistakes.

To set the stage, a few particularly relevant lines from the platform of the Colorado Democratic Party:

"At a time when public confidence in government is perhaps at its lowest in our history, when government has come to a standstill, held hostage by those who seek to serve themselves and not the common good, it is imperative that health and trust be restored to our democracy or we risk losing it all together."

"Above all, we expect officials to uphold and defend the Constitution of the United States."

Today, (October 6, 2013) as I listened to the pundits analyze the Tealiban's efforts to repudiate the debt of the United States, it occurred to me that many Democratic members of the 2010 Colorado General Assembly have something in common with these Tea Party anarchists.  Steel yourself, dear reader,  as we engage in a rather unsavory juxtaposition.

Parallel #1:  Here we are in 2013, and Congressional Tea Party anarchists are pushing Congress toward a default on the debt obligations of the United States.  Incredibly, just three years ago, many (not all) Democratic Colorado state legislators supported a default on the debt obligations of the State of Colorado (contracted, accrued, Colorado PERA pension debts.)  Colorado legislators defaulted on PERA pension debt with full knowledge of the fact that making such payments is a contractual obligation of the state.

Colorado's Democratic (and Republican) state legislators have been aware of the contractual nature of accrued public pension benefits in our state for more than 60 years (since the Colorado Supreme Court decisions in the public pension cases Bills and McPhail.)

Colorado Court of Appeals 2012 decision in Justus v. State (October 11, 2012):

“We consider McPhail and Bills dispositive (indisputably bringing to a conclusion a legal controversy) of whether plaintiffs here have a contractual right to a particular COLA.”

Nevertheless, in 2010, many Democratic Colorado legislators embraced a contrivance advanced by lobbyists for Colorado state and local governments, unions and corporations that sought financial benefit through breach of contract.  The lobbyists convinced many Democratic state legislators that the inflation protection provision in PERA pension contracts (COLA provision) could be altered retroactively.

Yet, a public pension COLA provision is simply a method by which a total defined public pension benefit is provided.  There is nothing inherent in this "method" (provision of a pension COLA) that negates its essence as a contractual obligation of Colorado PERA-affiliated employers.  How many Colorado state and local government employees would have stipulated up front the right of the Colorado Legislature to claw back one-third or more of their total accrued PERA pension benefit after retirement?

When the Colorado Legislature created the "automatic" Colorado PERA COLA provision in statute, the Legislature could just as well have offered PERA members a higher monthly pension benefit with no COLA provision attached.  Instead, Colorado legislators chose to deliver accrued Colorado PERA pension benefits by means of a pension COLA "escalator."  For decades, Colorado PERA members have exchanged their labor (and their pension contributions) for this statutory offer of a PERA COLA benefit.  Many have retired based on the PERA COLA benefit contractual offer.

Note that many private insurance companies sell annuities that offer delivery of the total purchased annuity benefit by means of an annual COLA "escalator" on the purchased income stream.  Having supported SB10-001 in 2010, taking contracted PERA COLA benefits, will these Colorado Democrats now argue that insurance companies that have sold annuities with contractual COLA provisions should have the right to unilaterally eliminate the COLA provisions after the fact?  Do these Colorado Democrats support one constitutional standard for corporations (insurance companies) and a separate constitutional standard for public entities?

Not all Colorado Democratic legislators supported the Colorado PERA pension contract breach in 2010.  The Pueblo Chieftain quoting from House Minority Leader Sal Pace’s website in February 2010:

"'I voted against the proposal because I don’t believe that the problems with PERA need an immediate fix and the solutions proposed unduly placed a burden on our seniors,’ Pace said in a statement on his Web site Tuesday."

Thanks also to the following Colorado House Democrats who refused to go along with the lobbyists' Colorado PERA debt-shift scheme in 2010: Representatives McFadyen, Merrifield, Massey, Weissman and Primavera.  When the lobbying pressure was intense, these state legislators retained their integrity.

Parallel #2: This week we see Congressional Tea Party anarchists decrying the level of the accumulated debt of the United States while ignoring the fact that these debts accrued in legislation adopted by the legislative body in which they currently serve.  Tea Partiers refuse to acknowledge that the nation's debt ceiling must be raised simply to meet debts that were previously incurred by Congress, legitimate debts of the United States.

Similarly, in 2010, many Democratic Colorado state legislators decried the levels of the public debt in Colorado (unfunded PERA pension liabilities) without acknowledging that these debts were accrued as a result of legislation adopted by the legislative body in which they currently serve (the Colorado General Assembly.)  The General Assembly sets PERA benefit levels in statute.  Colorado PERA pension benefits are offered by the General Assembly in statutory contracts as deferred compensation for work performed in the past.  In 2010, many of these Democratic state legislators enacted a bill that attempts to repudiate Colorado state and local debt.  In essence, the Colorado General Assembly is attempting to shift accumulated PERA pension debts onto the backs of a relatively small group of elderly Colorado residents.  (The Colorado General Assembly seeks to abrogate PERA pension contracts in spite of the fact that Colorado has the 16th lowest per capita public pension debt in the nation, according to the investment research firm Morningstar.  The Colorado General Assembly seeks to repudiate its pension debts in spite of the fact that less than three percent of all Colorado state and local government expenditures support public pension obligations, hardly a financial "burden.")

Parallel #3: Congressional Tea Party anarchists have no interest in raising additional resources to meet financial obligations that Congress has approved in the past.  Their preference is that the U.S. government default on its obligations.  Similarly, in 2009 and 2010, the first preference of many Colorado Democratic state legislators (encouraged, of course, by 27 statehouse lobbyists) was also default.  Rather than seeking additional resources to meet the accrued debts of Colorado state and local governments, these state legislators favored default.

(As we have seen, additional resources have been readily available to meet PERA pension debts.  For example, the legislators could have opted to honor their own contractual PERA pension obligations instead of appropriating $700 million for local government pensions that are not the state's contractual obligation, Old Hire Fire and Police Pensions.  Colorado legislators could have curtailed the state's generous corporate welfare programs.  Colorado legislators could have followed the example of other states and explored the use of mineral royalties to meet state pension obligations.  Colorado legislators could have submitted referenda to the voters proposing new revenues to meet the state's contracted debts.  Again, many Democratic legislators preferred breach of contract in 2010.)

Attention Colorado Democrats: Enough red flags have been raised by the party's complicity in the 2010 PERA pension contract breach to drape six miles of the Arkansas River.  The fact that I am able to draw any parallels at all between the behavior of some Colorado Democrats and the contemptible Teanderthals should raise concern in the party.

Is it acceptable for Colorado Democrats to abandon core principles (even when the lobbyists are wrenching their arms?)

More from the Colorado Democratic Party 2012 Platform:

"We petition Congress to enact legislation preventing courts and bankruptcy laws to be used to abrogate labor contracts and pension obligations."

"Colorado Public Employees Retirement Association (PERA) should remain a defined benefit plan, directed by a board elected by the membership."

"Colorado Democrats support: 'The implementation of cost of living adjustments on Social Security and Social Security disability benefits, equal to actual increases in the cost of living.'"

(My comment: the party supports the enhancement of Social Security COLAs that ARE NOT contractual obligations.  Should the party not also support the payment of COLAs that ARE INDEED contractual obligations?)

"Every human being has the right to be treated with dignity and all persons residing in the United States deserve equal protection under the law regardless of their race, disability, gender or gender identity, religion, sexual orientation, national origin, age, or physical or mental differences."

(My comment: Do Colorado PERA retirees not deserve equal protection under the law?  Is it acceptable that many Democratic Colorado lawmakers voted the break the contracts of this group in 2010?)

"We expect our elected officials to be committed to the highest standards of behavior, personal integrity and honesty and to demand transparency and open government . . .".

"The people must be informed by facts, not deception."

"We support the enforcement of laws addressing the inequities between men and women."
(My comment: Note that women were disproportionately impacted by the Colorado PERA pension contract breach.  Women make up 57 percent of all government workers, and 60 percent of local government workers.  Under the PERA pension contract breach, women provide a disproportionate share of the PERA pensioner subsidy to Colorado governments.

Not surprisingly, the Colorado Legislature's 2010 attempt to escape its contractual public pension obligations hits women, minorities, and particularly older women in Colorado hard.  Also, as noted earlier, the Colorado Legislature has just finished paying off $700 million in local government fire and police pension debt (that IS NOT the contractual obligation of the State of Colorado.)  It just happens that these local government pension contracts belong to primarily . . . males.

Colorado Democrats: We must examine the influence that lobbyists have on Democratic state legislators.  We must ask why a Democratic state legislator would support breaking the contracts of workers in order to lower the tax burden of corporations and wealthy taxpayers in the nation's 10th wealthiest state.

We must ask why Colorado Democrats helped employers attempt this abandonment of contractual obligations to pensioners in 2010?  Why a deal was cut in 2009 without deliberation of pension reform options in open legislative hearings in 2010?  Why Democratic Leadership relinquished the Legislature's public policy making authority regarding pensions to administrators and lobbyists in 2009?  Why Democratic Leadership failed to appoint an interim study committee in 2009 to examine legal, prospective pension reforms that were being enacted by other state legislatures?  Why Democratic Leadership failed to send an interrogatory to the Colorado Supreme Court in 2009 regarding PERA pension reform options? (Recall that the Legislature was encouraged to take this step.)

Colorado Democrats; let's clean up our act.  The Colorado Democratic Party is better than breach of contract.  The State of Colorado is better than breach of contract.  Support contractual public pension rights at  Friend Save Pera Cola on Facebook!


5 thoughts on “What Do (a Few) Colorado Democrats Have in Common with Tea Party Anarchists?

  1. Yep. That is correct. Doing this violates our Party's plank values.

    Guageing by paramaters other than what's right and wrong, behaving like republicans, is beneath Democratic Representatives, and defaulting on this obligation is wrong.


  2. Passage of Amendment 66 is dicey at this point due to current uncertainty over the national budget and debt limit, along with alarm over costly infrastructure replacement due to recent flooding.  Indeed, uncertain times bring out the "anarchist" in all of us, Democrat and Republican alike, maybe even supreme court justices.  It will be tempting to go after public retiree benefits even further … COLA and PERAcare … in lieu of increasing taxes to support core government functions, followed by perhaps the unthinkable, a clawback of current benefits. Plato: "Necessity {actuarial} is the mother of invention". 



  3. Legislative History of the Contracted PERA COLA.

    March 24, 1993 (1:32 PM – 2:28 PM)

    Rob Gray, Director of Government Relations, Colorado PERA testifying to the Legislature's House Finance Committee in regard to the "automatic" PERA COLA benefit under consideration (in House Bill 93-1324): “The PERA Board does support this bill.”  “We felt like it is something that is good pension policy . . . that it makes sense . . . THAT IT IS MAKING PERMANENT CHANGES, and also that it does help employers which is one of the goals of the bill.”  Rob Gray states that the proposed COLA "adds predictability for current and future retirees, people looking at leaving might look at this and say now I know how my future increases are going to be determined . . .”.  Rob Gray characterizes the "automatic" PERA COLA benefit as a Colorado PERA liability: “when a change in benefits is added, like this bill, it extends out the period for paying off that unfunded liability.” If you listen to the recording of this meeting, you will also hear a member of the House Finance Committee refer to the Colorado PERA COLA provision under consideration as a pension benefit that is “guaranteed,” “now and in the future.”

  4. Hawkeye,

    It's ironic that when the Colorado Legislature adopted the "automatic" PERA COLA benefit in statute (and eliminated the "ad hoc" COLA provision from Colorado law) PERA administrators testified that switching to the automatic PERA COLA was a good deal for PERA-affiliated employers.  Many expected that inflation would be much higher in the future and so argued that fixing an "automatic," contracted PERA COLA in statute placed a reasonable cap on future pension liabilities of PERA employers (state and many Colorado local governments.)  Rob Gray of PERA stated that the contracted COLA was in line with PERA's official,  future inflation expectations.  Which, by the way, remain at 3.5 percent.

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