Who Is In Charge

PERA bill goes to governor

The House Tuesday voted 36-29 to pass Senate Bill 10-001, the plan to restore the Public Employees’ Retirement Association to solvency over the next 30 years.

Public Employees' Retirement Association headquarters in Denver.

Because there were no House amendments to the Senate-passed version, the bill (text) now goes to Gov. Bill Ritter for signature.

Passage of the measure removes one big item from the legislature’s 2010 checklist. (A second major item also was checked off Tuesday with final House approval of some key tax bills. See bottom of this story.)

Although some Republicans argued long and hard against the PERA bill, the measure survived intact after a crucial set of amendments were added in a Senate committee, changes designed to gain the support of organized employee groups. The bill was pushed by the bipartisan team of Senate President Brandon Shaffer, D-Boulder, and Senate Minority Leader Josh Penry, R-Grand Junction.

Legislative leaders worked to pass the bill before March 1 in order to avoid the cost of a 3.5 percent retiree benefit increase scheduled to go into effect on that date.

A major element of the rescue plan is reduction of that 3.5 percent annual boost to 0 percent for the coming year and to 2 percent thereafter. In the future, certain conditions will have to be met for the 2 percent figure to change.

While employee and retiree organizations backed the bill, many individual retirees are unhappy with measure, arguing that 3.5 percent is a contractual right and can’t be changed. PERA officials believe the change is legal because of “actuarial necessity,” meaning that the financial condition of the system is so serious that major changes are allowed to make PERA actuarially sound.

The plan will not work financially without the reduction of retiree benefits, according to PERA.

Interestingly, in a year when the state is scraping for every dollar of tax revenue, the 0 percent requirement this year will reduce state income tax collections by $3 million, according to legislative fiscal analysts.

Some observers expect a retiree lawsuit on the 3.5 percent question.

Other provisions of the bill change employer and employee contributions, set new rules for working retirees, change calculations for determining the amount of retirement benefits, impose new rules on employees who leave the system before retirement and increase age and service requirements for some employees.

The bill imposes new increases in employer and employee contributions on top of already-scheduled hikes. By 2016, school districts will have to contribute 14.65 percent of payroll to PERA. Employees will have to pony up 13.5 percent by 2018. (The employee contribution is determined by a formula that takes 8 percent from individual employee paychecks – the current rate – and then additional money from district funds that supposedly would otherwise have been used for employee salaries. The 8 percent direct deduction won’t change under the plan.)

The comparable figures for the DPS Division of PERA are 18.25 percent for employers and a combined 13.5 percent for employees. (The system has separate Schools and DPS divisions because DPS was added to the system only this year.)

Its investments hollowed out by the recession, PERA’s net assets available for benefits dropped from $43.1 billion at the end of 2007 to $30.8 billion at the end of 2008, a loss of more than 25 percent. The system pays about $3.1 billion in benefits a year and receives about $1.7 billion in contributions from covered employees and their employers. PERA overall is about 70 percent funded.

The system has 190,684 active members, 81,248 benefit recipients and 143,619 inactive members (people with eligibility but no longer working in PERA-covered jobs.)

While often thought of as the state pension system, PERA membership is dominated by employees of schools and colleges. Of PERA’s 190,684 active members, 118,547 are in the school division. Some 44,806 people receive benefits from the school division.

In 2008 employers paid more than $430 million into the school division trust fund while employees contributed about $304 million. There were about $1.4 billion in benefit payments. Because of the hit taken in PERA’s investments, in 2008 the net assets of the school division trust fund dropped from about $23 billion at the beginning of that year to about $16 billion at year’s end.

The state division includes employees of 28 colleges, universities and other education agencies, with 11,679 members (about 20 percent) accounted for just by the University of Colorado, Colorado State, Metro State and Front Range Community College. Some higher ed employees have access to other retirement plans.

While PERA investments reportedly rebounded somewhat in 2009, system officials repeatedly have told legislators that investment income alone can’t return PERA to solvency.

PERA website with links to more information

Tax bills also ready for Ritter

Another big milestone was passed Tuesday when the House agreed to Senate amendments and repassed eight bills that will eliminate certain tax exemptions.

The measures, House Bills 10-1189-1195 and 1199, are projected to raise about $148 million in revenue for the battered state treasury.

The measures are backed by education groups because they believe cuts to state support of K-12 education will be deeper without the additional revenue. Even with the additional money, schools are facing cuts of at least $350 million in 2010-11.

The proposal of greatest interest to the public probably is House Bill 10-1191, which would eliminate a sales tax exemption on some soft drinks and candy.

Debate over the tax package has been partisan, ideological and very prolonged in committee rooms and on the floors of the House and Senate. Democrats have argued that the bills are a modest imposition on business to help maintain state services.

Minority Republicans believe that raising taxes is the wrong thing to do in tough economic times and also is unconstitutional. (Democrats are relying on a 2009 Colorado Supreme Court decision about the Taxpayer’s Bill of Rights as the legal justification for changing the tax policies without voter approval.)

In addition to soda and candy, the measures change tax exemptions for direct mail advertising materials, energy used in industry, software, some online sales, food containers and pesticides.

Legislative leaders also pushed for March 1 passage of the tax package so that some revenue would be available to help balance the 2009-10 budget.

Use the Education Bill Tracker for links to bill texts and status information.

cooling off

New York City charter leader Eva Moskowitz says Betsy DeVos is not ‘ready for prime time’

PHOTO: Chalkbeat
Success Academy CEO and founder Eva Moskowitz seemed to be cooling her support for U.S. Education Secretary Betsy DeVos.

In New York City, Eva Moskowitz has been a lone voice of support for the controversial U.S. Education Secretary Betsy DeVos. But even Moskowitz appears to be cooling on the secretary following an embarrassing interview.

“I believe her heart is in the right place,” Moskowitz, founder and CEO of Success Academy, said of DeVos at an unrelated press conference. “But as the recent interviews indicate, I don’t believe she’s ready for primetime in terms of answering all of the complex questions that need to be answered on the topic of public education and choice.”

That is an apparent reference to DeVos’s roundly criticized appearance on 60 Minutes, which recently aired a 30-minute segment in which the secretary admits she hasn’t visited struggling schools in her tenure. Even advocates of school choice, DeVos’s signature issue, called her performance an “embarrassment,” and “Saturday Night Live” poked fun at her.  

Moskowitz’s comments are an about-face from when the education secretary was first appointed. While the rest of the New York City charter school community was mostly quiet after DeVos was tapped for the position, Moskowitz was the exception, tweeting that she was “thrilled.” She doubled-down on her support months later in an interview with Chalkbeat.

“I believe that education reform has to be a bipartisan issue,” she said.

During Monday’s press conference, which Success Academy officials called to push the city for more space for its growing network, Moskowitz also denied rumors, fueled by a tweet from AFT President Randi Weingarten, that Success officials had recently met with members of the Trump administration.

Shortly after the election, Moskowitz met with Trump amid speculation she was being considered for the education secretary position. This time around, she said it was “untrue” that any visits had taken place.

“You all know that a while back, I was asked to meet with the president-elect. I thought it was important to take his call,” she said. “I was troubled at the time by the Trump administration. I’m even more troubled now. And so, there has been no such meeting.”

Civil action

Detroit school board to protesters: Please remain civil. Protesters to school board: You’re naive

PHOTO: Erin Einhorn
Detroit activist Helen Moore speaks with her supporters from the stage at Mumford High School. Her removal from the auditorium prompted loud objections that led to the meeting's abrupt ending.

A day after the Detroit school board abruptly ended a meeting that was disrupted by protesters, the meeting is being rescheduled, while the board president is making an appeal for civility.

“The board is extremely disappointed that the regularly scheduled meeting tonight was adjourned early due to extreme disruptive behavior from several audience members,” school board president Iris Taylor wrote in a statement issued late Tuesday, several hours after the meeting’s chaotic end.

“It is our hope moving forward that the community will remain civil and respectful of the elected Board and the process to conduct public meetings. We must be allowed to conduct the business the community elected us to do.”

The drama Tuesday night came from a large group of parents and community members, led by activist Helen Moore, who packed the board meeting to raise concerns about a number of issues.

Moore had sent the school board an email requesting an opportunity to address the meeting Tuesday on issues including her strong objection to the news that Taylor and Superintendent Nikolai Vitti had attended a meeting with Mayor Mike Duggan and leaders of city charter schools to discuss the possibility of working together.

The mayor, in his state of the city address last week, discussed the meeting, calling it “almost historic,” and said district and charter school leaders had agreed to collaborate on a student transportation effort, and on a school rating system that would assign letter grades to Detroit district and charter schools.

When Taylor told Moore during the meeting that she would not be allowed to give her presentation Tuesday night, saying she had not gotten Moore’s request in time to put it on Tuesday’s agenda, Moore and her supporters angrily shouted at the board and proceeded to heckle and object to statements during the meeting.

The meeting was ultimately ended during a discussion about the Palmer Park Preparatory Academy, a school whose classes are being relocated to other district buildings for the rest of the year because of urgent roof repairs and the possibility of mold in the building.

As Moore shouted over Vitti’s discussion about the school, Taylor ordered that the 81-year-old activist be escorted from the Mumford High School auditorium where the meeting was being held. That triggered an angry response from her supporters and ultimately brought the meeting to a close.

The current Detroit school board came into existence a little over a year ago when the state returned city schools to Detroiters after years of control by state-appointed emergency managers.

The board’s swearing-in last January was heralded as a fresh start for a new district — now called the Detroit Public Schools Community District — that had been freed from years of debts encumbered by the old Detroit Public Schools.

Since then, meetings have been interrupted by the occasional heckler or protester, but they’ve largely remained orderly, without a lot of the noise and drama that had been typical of school board meetings in the past.

In her statement Tuesday night, Taylor lamented that the new school board wasn’t able to get to most of the items on its agenda.

“Detroiters have fought long and hard to have a locally elected board to govern our schools,” Taylor wrote. “It would be shameful to have our rights revoked again for impediments. It sets a poor example for the students we all represent, and it will not be tolerated by this Board.”

Wednesday morning, Moore said she plans to continue her vocal advocacy, even if it’s disruptive.

“If that’s the only avenue we have to get our point across, when they don’t allow us to speak, then we must take every avenue,” Moore said. “Time is of the essence with our children. And they spend too much time with distractions, listening to the mayor, listening to the corporations, and not listening to people who have children in the public schools.”

Moore, who is active with an organization called Keep the Vote/No Takeover Coalition and with the National Action Network, said she fought for years for Detroiters to again have a locally elected school board. City residents did not have control of their schools for most of the last two decades.

“We worked like crazy,” Moore said, but she asserts that most school board members are “naive.”

“They don’t know the history,” she said. “They need to be educated and that goes for Dr. Vitti too. We need to educate them and that was a first start.”

The board has scheduled a special meeting for 12:30 p.m. Thursday at its Fisher Building headquarters where it can return to its unfinished business from Tuesday.

PHOTO: Erin Einhorn
Detroit activist Helen Moore waved to her fellow activisits from the stage at Mumford High School. She returned to the room after her removal from the auditorium prompted loud objections that led to a school board meeting’s abrupt ending on March 13, 2018.