Pension obligations have bankrupted cities such as Stockton, Calif., and have helped destroy the business environment in Illinois.
What happens when the government decides you aren’t smart enough to handle more than a simple, direct, but incomplete story?
The fiscal note for House Bill 1176 reads like a brief from PERA management.
At an estimated cost of $220 million per year to Colorado taxpayers, all retired members of state and local public pensions that file Colorado tax return will get a $700 tax credit.
The single most important economic story of the moment is inflation. Unfortunately, we know little about its long-term effects on Colorado’s public pensions.
In short, the added $73 million from the PERA cash fund and its returns simply aren’t enough to make up for shorting the next two years’ payments
The long-term threats to any defined benefit retirement plan remain the same as they have always been – volatility in returns, increases in lifespan, inflation or deflation.
By failing to lay out clear rules for what is permissible and what isn’t with respect to existing benefits, the Court’s ruling in Justus, celebrated for helping PERA’s finances right now, may end up making such a bleak scenario more likely in the future.
By encouraging people to work until 60, and then retire soon thereafter, PERA deprives the government and the taxpayer of some of its most experienced employees’ services.
It is telling that each of these changes – every last one – has been opposed by PERA and its allies in the public employees unions here in Colorado.
