Colorado pension plan in trouble

As some of you may have heard, PERA, Colorado's Public Employee Retirement program, has got a little problem. At latest report, its obligations were down to being about 60% funded, a couple of decadesout, down from 80%, which is considered fully-funded. This is before taking into account paper losses from real estate and other non-equity investments.

The reason that being underfunded 30 years out is a problem is that there are still bills to pay today, and that at some point you start paying out money faster than it can grow. One day, you wake up, and the seed corn is gone and the retirees are at the door.

Yesterday's Denver Post cites a 2004 State AG's report to the effect that there may be some legal limitations to what PERA can do. In all likelihood, benefits to current retirees are sacrosanct, barring a constitutional amendment (aren't you now glad that we rejected Referendum O?) to permit a reduction of benefits.

New hires should be put into the 401(k) without even the option of a defined-benefit plan. Those at or approaching retirement age should probably not have their benefits tinkered with. But some combination of higher contributions by employees, lower benefits, and a higher retirement age (really, who gets to retire on full bennies at 57?) will probably be required.

PERA's Board may have to show to a court's satisfaction that all this is necessary to prevent major street corners from being overrun by former state employees and the inevitable tin cup shortage. At the same time, there's no question that PERA has been operating under one of those unspoken assumptions that the taxpayers will always be there to bail them out, if necessary. Thus the somewhat rosy 8.5% growth assumptions underlying their projections.

We'll probably have to await the 2008 Annual Report to see exactly how bad things are, but there's no question that the sooner we deal with this the better. After all, better to ask public employees now to contribute more to their own financial security than to ask you, 15 years down the road and a few years away from your own golden years, to work for a few more years.

Ritter's fiscal grade is a D

Bill "Recession" Ritter, as disgusted House Republicans now call Colorado's chief executive, managed only a D in the Cato Institute's fiscal policy report card on the nation's governors for 2008. Chris Edwards of Cato said Ritter's spending record was above average, but his grade was pulled down by two recent attempted tax hikes, the school property tax case now before the state Supreme Court and the energy severance proposal defeated by voters this month.

The complaint by a Ritter spokesman that the study wasn't "neutral or unbiased" loses force in light of the well-mixed partisan standings, including a No. 3 ranking given Gov. Joe Manchin, D-WV, and a No. 40 ranking for Gov. Butch Otter, R-ID. Ritter stood 26th out of 46 governors ranked.

A partial list of rankings is here. News story from the Rocky is here. This link shows the full study.

The blueing of Arapahoe

There were hints in October that Arapahoe Republicans were in for another bad year. My precinct in Centennial, once as red as they come, blossomed with Obama yard signs. Then County Clerk Nancy Doty announced at the weekly GOP breakfast that voter registration in the county, which had tilted heavily our way until recently, now showed an edge of about 400 for the Dems.

According to the Clerk's official website, that edge is now almost 6000, and the new normal is depressingly evident in vote tallies from Nov. 4. The following summary is from a talk I gave to the Aurora Republican Forum last Saturday.

ARAPAHOE COUNTY VOTING TRENDS, 2002-2008

2008 Obama-D over McCain-R by 55-43% for President Udall-D over Schaffer-R by 54-42% for US Senate

2006 Ritter-D over Beauprez-R by 60-40% for Governor

2004 Bush-R over Kerry-D by 52-48% for President Salazar-D over Coors-R by 53-47% for US Senate

2002 Owens-R over Heath-D by 69-31% for Governor Allard-R over Strickland-D by 53-47% for US Senate

Another troubling indicator for Republicans is the erosion of their formerly unquestioned dominance of the Arapahoe County Board of Commissioners. A switch of just 565 votes in Commissioner Rod Bockenfeld's narrow reelection victory this year would have given the Dems 3-2 control of that board.

When I came to the State Senate in SD-27 in 1998, SD-28 to the east of me and SD-26 to the west of me were both Republican seats and taken for granted as safe. No more. Sen. Nancy Spence, who succeeded me four years ago and won again comfortably this year, is it for Republicans from our county in the upper house.

First, Democrat Suzanne Williams took 28 from Bruce Cairns in 2004 and was easily reelected this year. And now, subject to a recount, it appears Democrat Linda Newell has won 26 from Lauri Clapp, who was seeking to hold the GOP seat for retiring Sen. Steve Ward.

HD-38, covering part of the same Littleton area as SD-26, went to Joe Rice and the Democrat in 2006 when former Republican House leader Joe Stengel was termed out.

What has caused the blueing of Arapahoe? It's obviously some combination of new residents moving in as others leave, younger voters coming of age as seniors pass from the scene, and superior competitiveness of Democrats among unaffiliated voters.

Only that third factor is in Republicans' control, but it needs to be a focus of soul-searching and new efforts, or Colorado's oldest county will continue changing its political complexion in a way that leaves conservative old-timers shaking their heads.

Coloradans leaned right on ballot issues

While the Colorado losses by Schaffer and McCain are disappointing, we fared better on a number of statewide ballot issues. Amendments 47 and 49 went down to defeat at the hands of union-extorted money.

But Amendment 54 squeaked by 52-48, and it may well be the most efficacious of the three, limiting certain campaign contributions from unions and vendors of sole-sourch serivces to the government.

Amendment 59, which would have gutted TABOR, failed by a comfortable margin. Outgoing Speaker Romanoff completely sold out to this effort, but the artificially-induced budget squeeze will have to be resolved some other way.

Amendment 58, which would have hiked energy taxes going into a recession, likewise suffered the ignominious defeat it deseves.

Referendum O, which would have severely limited the ability of citizens to act as a check on their own legislature's excesses, went down to defeat as well.

And finally, Amendment 46, which would eliminate all racial and gender preferences by state actors, is failing very narrowly with most of the vote counted. That may still change with final returns.

Editor: Meanwhile in Nebraska, an identical civil rights initiative passed yesterday by 58-42%, sustaining some momentum for Ward Connerly's heroic national effort to achieve color-blind law. And Californians passed their Proposition 8, affirming marriage between one man and one woman in contravention of the recent state supreme court mandate for same-sex marriage.

Face it, FasTracks is a failure

RTD presents five FasTracks options to the public. All are permutations of the original plan, ranging from shortened lines and curtailed service, to the full system. Mentioned with muted voices are possibilities of a 2034 completion date, and the 67% tax increase approved in 2004 becoming a 116.67% increase. More federal grants will be requested. This would also fall short, even in a mild recession.

The original 0.6% tax thirty years ago (!) was authorized with the stipulation of providing rail. None was built. Recognize that sales tax increases hurt business. Taking billions out of the economy is recessionary.

The project is currently $3.2 billion over budget, with $2.8 billion tax revenue shortfall anticipated. There’s the matter of each community being assessed 2% of the cost. Most communities have no idea where this is coming from. Some say, “in-kind services.” Mysteriously, this recently became 2-1/2%. Look for a local tax increase. The Federal share could build all the highways we need.

The economic downturn and rising materials costs are blamed. Many other major projects are progressing. There was intentional low-balling and ignoring of associated items, to make the project more attractive. Add a generous serving of incompetence.

Continuation of these rail options is a distraction from proven transportation solutions. Original RTD and Denver Regional Council of Governments (DRCOG) studies ranked rail as less efficient than bus rapid transit (BRT), in terms of speed, frequency, flexibility, capital cost, and operating expenses. All recent US General Accounting Office (GAO) Reports to Congress reinforce this. Rail projects across the country are financial disasters with declining ridership. Only one city, New York, has a rail system that carries as much as one freeway lane.

FasTracks was conceived as a response to traffic congestion. DRCOG forecast a negligible 0.43% reduction by the target year, with consultants predicting zero effect. Note that transit oriented development (TOD), catchwords for liberal urban planners, invariably causes sub-regional traffic congestion. Recommendations are made for nearly 30 times the typical suburban density, requiring high rise buildings. Suggestions are made for forcing people to use rail and live in TODs.

Much of the impetus for the project comes from land speculators who profit by obtaining local council high density approvals. Eminent domain abuses are inflaming the public.

Proponents admit that the project is a fiasco, progressing because of voter approval. Voters were given the choice between a rail project, or no project. The ballot offered no choices or comparisons of proven alternate modes. Voters were asked to choose the most costly project in Colorado’s history on the basis of feel-good slogans. Public comment is limited to minutiae… bicycles on trains, toilets in stations…with basics avoided.

Why continue the fiasco? RTD recently let a $184 million no-bid contract, after learning that the contractor has been involved in massive bribery scandals. Audit reveals their $2.3 billion slush-fund for “questionable transactions.” $543,000 in political contributions were made by contract recipients. RTD's manager has an annual half-million package, and his city councilor wife is involved in TOD approvals. It’s called wiring contracts by “pay-to-play” manipulators. Firms making six-digit contributions expect, and receive, contracts.

Existing Denver rail runs at 10% of capacity, as compared to nearly 40% nationally, and with many riding because of curtailed bus service. FasTracks will increase air pollution and create 138 grade crossings and 2,000 dead ends, seriously hampering emergency vehicle response.

This project is a dog and should be repealed.