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June 24, 2014 01:58 PM UTC

Alaska Legislature Pays Off $3 Billion in Public Pension Debt. Colorado Legislature Prefers Theft.

  • 1 Comments
  • by: PolDancer

Think that the word "theft" is too strong to describe Colorado's public pension taking in 2010?

Here's a definition from Law.com:

"Theft: the generic term for all crimes in which a person intentionally and fraudulently takes personal property of another without permission or consent and with the intent to convert it to the taker's use."

Let's see if the term "theft" appropriately describes the Colorado Legislature's attempt to "claw back" public pension benefits.

Colorado's public pension theft in 2010 was a taking of "property," (accrued Colorado PERA public pension COLA benefits,) and it was "intentional," (premeditated, beginning in early 2009.)  Colorado PERA pensioners did not "consent" to the taking of their property (they told the legislators in testimony on the "COLA-theft bill" in 2010 that they would sue to recover their property.)  And, the property taken was "converted" to the "use" of the State of Colorado (money was freed up for the politician's favorite discretionary programs, and to add to Colorado's billions of dollars in corporate welfare payments.)  In my view, the word "theft" fits the bill perfectly.

Colorado residents, do you hold your home state in high esteem?  Consider it to be exceptional?  While the State of Colorado engages in theft, the State of Alaska honors its debts.

The Alaska Legislature has unanimously adopted a bill to pay down the state's public pension contractual obligations.  Alaska Governor Parnell recently signed the bill.  (Colorado state legislators see theft as the more politically appropriate means of addressing their accumulated Colorado PERA pension debt.)

Lawyers for the State of Colorado and its pension-administering arm, Colorado PERA, are currently trying to persuade the Colorado Supreme Court to support legislative theft of accrued, earned, contracted Colorado PERA public pension benefits in our state.

See this article:
http://coloradopols.com/diary/59115/colorado-pera-pensioners-expose-deception-by-pera-lawyers-at-the-colorado-supreme-court

My guess is that the Colorado Supreme Court will render a decision in Colorado's public pension COLA lawsuit, Justus v. State, within the next three months.  Then, we will know if unabashed, premeditated governmental theft is constitutionally permissible in our state (and under the U.S. Constitution.)

The State of Colorado is attempting to escape its contractual obligations in the Colorado PERA pension system.  Colorado PERA pensions are a substitute for Social Security.  Under federal (IRC) law, public pension systems must have "definitely determinable" benefits in order to remain "qualified" public pension plans.  If a state legislature can take back public pension benefits that have already been earned in a public pension system, how is it possible that the public pension system has "definitely determinable" benefits?

The Colorado PERA pension COLA benefit is a statutory "automatic" public pension COLA benefit that cannot legally be reduced for pensioners who have fully-vested contracts.  The COLA benefits of PERA pensioners have already been earned under their PERA statutory contracts.  Statutory "ad hoc" public pension COLAs can be reduced for current retirees.  (The Colorado Legislature struck the "ad hoc" statutory pension COLA language from Colorado law in 1993.)

In 2010, a group of 27 lobbyists hired by self-interested parties persuaded a slim majority of Colorado legislators to vote for their PERA pension theft scheme.  In 2010, the Colorado  Legislature passed the bill, SB10-001, retroactively taking contracted Colorado PERA pension COLA benefits from PERA pensioners.  The PERA pensioners sued the state and the resultant lawsuit, Justus v. State, is now before the Colorado Supreme Court.

Colorado PERA's lawyers have testified to the Colorado Legislature that the PERA COLA is a Colorado PERA contractual obligation.  The Colorado Court of Appeals has confirmed the PERA COLA benefit as a Colorado PERA contractual obligation.  Yet, Colorado PERA's Executive Director Greg Smith continues to argue that the PERA "COLA-theft" bill, SB10-001, is a "model" for other states.  Theft to escape public pension contracts, theft to inflate away state public pension debts, theft taking earned compensation from elderly pensioners to minimize future state taxes . . . this is a "model" for other states.  Welcome to Colorado.

From Alaska's KTUU:

"Parnell Signs Pension Funding Bill."

"'It takes $3 billion out of our budget reserves and moves it to the pension trust funds, $2 billion to the teacher retirement system and $1 billion going to the public employees retirement system,' Parnell said at a press conference."

"The governor said by paying a large sum of money up front, it will drop the yearly payments into the system, saving taxpayers more money in the long run."

(My comment: As we have seen, the Colorado Legislature has not paid its full Colorado PERA pension bills for the last twelve years [ARC] and, accordingly, has racked up its PERA pension debt.  It now seeks to escape that debt through breach of contract.)

KTUU:

"'Today, we're helping approximately 120,000 retirees. Those are Alaskans, they are beneficiaries, and dependents, teachers, firefighters, state employees and municipal employees,' said Representative Cathy Munoz (R-Juneau)."

"It takes the burden off of our kids and grandkids to pay this debt that is owed.  It is a burden that we will make good on, but it takes that obligation off of future generations of Alaskans."

(My comment: In Colorado, many politicians prefer to remove burdens from future taxpayers through simple theft.)

http://www.ktuu.com/news/news/parnell-signs-pension-funding-bill/26624530

From Alaska station KTOO:

"Surrounded by dozens of public employees in the atrium of Juneau’s State Office Building, Gov. Sean Parnell on Monday signed legislation transferring $3 billion from state savings into Alaska’s public employee pension systems."

"Like many state and local governments across the country, Alaska’s pension shortfall is the result of years of neglect and bad financial advice.  Even as the estimated amount of future payments to retired public employees has grown, state and municipal officials opted to put minimal amounts into retirement systems."

"The cash infusion cuts the long-term projected deficit for the Alaska Public Employee Retirement System and Teachers’ Retirement System to an estimated $9 billion.  It also reduces the amount of future annual payments into the systems, which Parnell said is the single biggest cost driver of the state’s operating budget."

(My comment: Public pension debts are paid off over up to 70 years.  Public pension systems never have to pay off all of their accrued debts as they exist in perpetuity.  Public pension systems are well-funded at 80 percent funded ratios according to rating agencies.  Over the last nine decades, the Colorado PERA pension system has had all of its debts paid off in only two fiscal years.  Colorado PERA's pension obligations consume less than 3 percent of all Colorado state and local government revenues.  Is this "burden" worth scrapping the Colorado Constitution?  Is it worth all of the deceit we have seen from Colorado PERA officials?)

KTOO:

"Alaska communities backed the pension infusion plan.  Juneau Assemblywoman Karen Crane is president of the Alaska Municipal League, a group that lobbies the state and federal governments on behalf of cities and boroughs."

http://www.ktoo.org/2014/06/23/gov-parnell-signs-3-billion-perstrs-infusion-bill/

(My comment: In Colorado, our association of cities, [the Colorado Municipal League, CML] sat back and watched as Colorado state legislators passed a bill to break Colorado PERA public pension contracts in 2010.  Why wouldn't they?  If Colorado state legislators are successful in breaking Colorado PERA public pension contracts, then Colorado municipalities [CML members] in the PERA pension system escape billions of dollars of debt.  If successful, the SB10-001 scheme will free up even more Colorado taxpayer resources that these communities can give away to corporations, or use to further lower taxes.)

Note that Colorado governments currently give away thirteen percent of Colorado's public sector resources to corporations, yet simultaneously plead poverty before the Colorado Supreme Court. Colorado governments have given away billions of dollars to corporations, yet have the temerity to argue that they are unable to meet their contractual PERA pension obligations.  Thirteen percent of Colorado's public sector resources are given away to corporations:

http://www.nytimes.com/interactive/2012/12/01/us/government-incentives.html#CO

http://www.nytimes.com/interactive/2012/12/01/us/government-incentives.html

Huffington Post:

"State and local subsidies to corporations: An excellent New York Times study by Louise Story calculated that state and local government provide at least $80 billion in subsidies to corporations."

"Amazon, Microsoft, Prudential, Boeing and casino companies in Colorado and New Jersey received well over $200 million each."

http://www.huffingtonpost.com/bill-quigley/ten-examples-of-welfare-for-the-rich-and-corporations_b_4589188.html)

Support the rule of law in Colorado at saveperacola.com.

Comments

One thought on “Alaska Legislature Pays Off $3 Billion in Public Pension Debt. Colorado Legislature Prefers Theft.

  1. Hey Algernon, I'm beginning to think it's all over for the retirees.  In 2010, the legislature was stampeded into a hasty vote for SB10-1 by a massive lobbying effort, and then the signing governor, Bill Ritter, abruptly stopped his reelection campaign in order to take a $300K plus job loosely affiliated with CSU (a gift from special interests) in order to spike his PERA pension to make up for the COLA theft and future retroactive retirement benefit claw backs.  Some high-end, fearfully pragmatic PERA retirees, active in public employee associations, were persuaded by PERA managers to give up a portion of their benefit in the cause of "shared sacrifice" … or risk losing much more in the future if the trust fund ran out of money.

    Then over the last four years we've witnessed contrived, machiavellian legal reasoning by the Colorado AG office and PERA to uphold the "COLA-theft" provision of SB10-1.  And on June 4th, some Supreme Court justices displayed what appears to be willful ignorance of contract law as it relates to public employees during oral arguments.  

    My rhetorical question:  Is our deferred compensation "defined" benefit pension becoming an "undefined" benefit on par (or in competition) with welfare programs?    

     

     

     

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