DENVER (AP) — Colorado lawmakers were working quickly Wednesday to reach a deal to stabilize the state’s public pension system, which has at least $32 billion in unfunded obligations, as the clock wound down on the last day of the legislative session.
House Democrats and Senate Republicans were negotiating cuts to retirement benefits for public sector workers and increases in contributions from taxpayers and employees alike to pay off the system’s liabilities over a 30-year period.
The stakes are high for the 560,000 working and retired members of the Public Employees’ Retirement Association. Without a deal by midnight, the pension’s problems are only expected to get worse next year.
“Every day and year the Legislature waits to address necessary reforms, the cost of these reforms to Coloradans both in and outside of (the system) will grow,” three members of the state pension board wrote in a plea to Democratic Gov. John Hickenlooper and top lawmakers this month.
If a pension overhaul clears the Legislature, it would mark the second major restructuring of the system since the Great Recession, when the fund’s assets dropped dramatically. In 2010, lawmakers approved benefit cuts and increased contributions over several years to strengthen the fund.
The fix fell short, in part because retirees are living longer and the pension’s investments are no longer expected to grow as much as policymakers had previously projected.
Past funding shortfalls have become more pressing now that Baby Boomers are retiring and drawing benefits. And there’s fear that another recession could plunge the fund into insolvency.
The Democrat-led House and Republican-led Senate have resolved other top priorities of the 120-day session.
In March, lawmakers passed a $28.9 billion budget that boosts funding to transportation and schools. This week, they finalized a related K-12 funding bill that raises spending by $461 million in the fiscal year that begins July 1.
On Tuesday, lawmakers passed a bill to ask voters to borrow $2.34 billion for transportation projects. The bill sets aside $645 million for roads over the next two years and would ask voters in 2019 permission to issue $2.34 billion in transportation bonds.
The state would owe up to $3.25 billion in borrowing costs over 20 years.
Other pending last-minute legislation included possible changes to the structure of the state’s civil rights division.
By BRIAN EASON and JAMES ANDERSON, Associated Press
(© Copyright 2018 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)