DENVER – Colorado’s two-term Republican treasurer, Walker Stapleton, released his first campaign ad this week, in which he touts himself as “a conservative who gets things done” but does not mention PERA — the state pension system that he has made a focal point of discussions during his time in office and his gubernatorial campaign.
The Public Employees’ Retirement Association (PERA), which more than 560,000 current and former state employees are members of, has unfunded liabilities of more than $32 billion, which has threatened the state’s credit rating and led to fears for those who rely on the pension system for their retirement.
The pension became the centerpiece of discussions during this year’s legislature, buoyed by rallies by Colorado teachers who demanded fixes to the system in addition to better pay and school funding.
Yet after a last-minute deal in the legislature to try to shore up the system, some in Colorado are questioning how much Stapleton was involved in the PERA discussions this year, while others who were more closely involved say Stapleton’s work backs up his talk.
Stapleton's ad does not mention PERA, and rather focuses on his support of President Trump’s tax cuts and his antipathy for “sanctuary cities.”
Some of the questions come from Stapleton’s political opponents about five weeks ahead of the June 26 primaries. Those same opponents have also scrutinized Stapleton for his ballot petition drive, which he tossed out over fraud concerns – opting instead to go through the state assembly vote, which he won.
And the discussions about his effectiveness as a leader come after a February Magellan Strategies poll of likely Republican primary voters showed Stapleton was the frontrunner for the party’s gubernatorial nomination among those polled.
From several proposals, to a last-minute deal
After the fund suffered a serious hit at the onset of the recession in 2008 , lawmakers in 2010 tried to fix it, but a slow phase-in of some of the changes, market shifts and conservative actions taken by the PERA board left PERA with 58 percent of the money it needs to pay retirees at the end of 2016.
That led Standard and Poor’s to warn the state that its credit rating was at risk and that the liabilities needed to be addressed this year.
Stapleton laid out a broad plan to rescue PERA in December, which differed from a separate proposal endorsed by the PERA board and one unveiled by Gov. John Hickenlooper. Stapleton’s plan called for freezing pension benefits and cost-of-living adjustments for retirees until the pension system was out of the woods.
After months of discussion and some downtime , state lawmakers came to a last-minute agreement on May 9 to pass Senate Bill 200, which aims to pay off over the next 30 years the $32 billion funding shortfall (which some, like Stapleton, estimate could be closer to $50 billion).
In the process, the plan will force most public employees to contribute an extra 2 percent to the pension, raise the retirement age to 64, and eliminate cost-of-living adjustment raises for two years, then reduce them by half a percent. Some workers will also be able to opt out of the system and join a defined contribution plan – but not teachers – and nearly all retirees will see cuts to their benefits.
The deal will inject $225 million of general fund money each year into paying down the liabilities in order to try and meet the 30-year goal.
As a gubernatorial candidate, Stapleton has touted his work toward trying pay down PERA’s unfunded liabilities.
“I am running for Governor to put an end to the special interest wants overriding taxpayers’ needs,” his website says . “Our PERA obligations are just one of many examples of government mismanagement and neglecting the taxpayer. I will bring the same persistence in fighting for economic reform to the Governor’s office as I have shown as Treasurer.”
Stapleton’s response to PERA deal noticed by political opponents
In a news release issued after the measure’s passage, Stapleton – in his capacity as state treasurer – said he was appreciative that lawmakers were paying down the liability, but that he wasn’t entirely happy.
“While I appreciate that the legislature has at long last heeded my call, the concern remains that this amounts to yet another incremental fix on the back of Colorado taxpayers,” he said in a release. “Until we gain the will to structurally fix this system properly for the long term, taxpayers will keep being asked for more money to bailout PERA, and we will continue making promises to Colorado’s 600,000 workers that we can’t fulfill.”
Yet in a speech last weekend made to El Paso County Republicans, Stapleton said the legislative measure “shored up” PERA for the time being.
“I have been the longest, largest, loudest voice for reforming PERA, and as a result of Republican leadership, we have shored up that system for 500,000 public workers in the state of Colorado,” he said, according to a video recording obtained by Denver7.
Also last week, one of Stapleton’s political opponents in the gubernatorial race, Republican Doug Robinson, told a gathering in Elizabeth that Stapleton didn’t attend a May 3 emergency PERA board meeting that took place ahead of the deal or take part in legislative talks.
“He didn’t show up and nobody says that they saw him at the end of last week or earlier this week,” Robinson said, according to audio obtained by Denver7. “He’s on the board. And he’s on the job. He’s running for governor, yet he – this is one of his major responsibilities as Treasurer.”
A spokesperson for Robinson said those claims came from conversations with people at the Capitol, press coverage and social media posts.
"Walker's hung his hat on being "the loudest voice on PERA", but at the end of eight years, what does he (or the taxpayers) have to show for it?” the spokesperson said in a statement to Denver7. “He's barely even shown up for the meetings. Let's just call a spade a spade — Walker's only real interest in PERA is in its ability to serve as a talking point for his political ambitions."
But a spokesperson for Stapleton refuted Robinson's comments, and when asked about a perceived difference in Stapleton’s official statement and what he said to El Paso County Republicans, said it was “splitting hairs.”
The Colorado Democratic Party’s spokesman, Eric Walker, also said he believed Stapleton had also not been as involved in the discussions as he should have been, citing Stapleton’s out-of-state fundraisers, on which Westword reported.
“Stapleton loves to talk about reforming PERA, but when it comes to actually doing the work, he’s been missing in action,” Walker said. “Stapleton was recently caught on tape talking about all of the out-of-state campaign events he’s been doing – perhaps he was holding another fundraiser in New York or California or Florida or Texas instead of doing his job.”
Stapleton’s PERA involvement a matter of who you ask
While Stapleton’s political opponents make clear they believe that Stapleton had little effect on the final PERA measure, those who were closely involved in the discussions said he indeed had a role – but to varying degrees.
His work – or lack thereof – in the final deal comes from discussions with four other people closely involved in the PERA discussions over several months, some who agreed to speak on the condition they not be named because of their involvement in Colorado politics.
One person who has been involved in the latest PERA fix discussions since they seriously got underway last fall said that Stapleton and his deputy had been “very vocal” at that time in calling for reforms. The person said they had been involved in several meetings with Stapleton regarding PERA, including at least one in which Stapleton laid out specifics about his plan – details that were published in December by The Denver Post.
“I think the one thing is, to be completely fair, he did have this idea but there weren’t the votes for it,” the person said. “Putting it all on the retirees didn’t have any support. … He’s been talking about [PERA] for a long time and did probably influence the rate of return discussion. But as far as a plan that worked in the world of the legislature, he had one idea.”
“It’s hard to extrapolate. There wasn’t a formal role for the treasurer to be in the negotiating room,” the source added. “It then becomes, well, how did he choose to participate?”
But that person said they did not know first-hand what happened on the last day of the session, though they said the final deal worked for most involved.
“Everyone ate something, but we’re happy,” the source said, noting that Senate Bill 200 received 34 votes in the Democrat-led House and 24 in the GOP-held Senate.
Those sentiments were reflected by leadership in both chambers and by the bill’s sponsors, which included Republican Sen. Jack Tate and Democrat House Majority Leader KC Becker, who both spoke to Denver7 for this story.
Tate, whom Senate President Kevin Grantham praised in an end-of-session news conference for his work on Senate Bill 200, said Stapleton was “very important in making sure we got a good policy.”
He said Stapleton had been focused on PERA’s solvency issue since taking office, and that Stapleton advised him on many of the technical issues surrounding PERA’s liabilities, which include its investment structure and how liabilities are calculated.
“I have a lot of expertise myself, but he’s more knowledgeable about pensions than I am,” Tate said.
And while Tate admitted he wasn’t sure if he talked to Stapleton on the final day of the session, he said he “certainly” talked to him on multiple occasions “in the final week.”
But he added that “the legislators are the ones who make the deals” and that it might not be the best idea to have a political candidate involved in high-stress, last-minute political discussions on the legislative floor.
“On Wednesday night, when you’re trying to get policy done instead of politics, for someone running for governor, it’s pretty important not to offer an extremely strict position because it becomes politicized,” Tate said.
Becker agreed with Tate’s sentiments about trying to avoid politicizing the bill as lawmakers tried to pass it just hours ahead of the midnight end-of-session deadline.
“We have a split legislature, so it’s hard in a situation like that to find common ground on such a large, impactful issue,” she said.
She said that Stapleton didn’t reach out to her in the final days of the session, but said she’d heard from others at the Capitol that he was calling Republicans and encouraging them not to pass the measure. Becker also said she knew that Tate had talked with Stapleton.
She said she met with Stapleton in January to discuss a PERA fix measure and that he at the time encouraged her and other lawmakers to pass a fix this session, commenting about PERA being in “really, really bad shape,” she said.
She said she spoke throughout the session with PERA, the office of state planning and budget, school districts, unions and the governor’s office about the measure, and said that PERA had models for all of the competing proposals trying to amend the measure that was introduced.
“That’s kind of the sausage making. Everyone has a different take on it and you see where the support is, and you make tradeoffs and find common ground,” Becker said. “That’s what we worked on. I’m glad we got it done because I don’t want over 500,000 beneficiaries to have any uncertainty about their retirement.”
Stapleton’s campaign responds
When asked to respond to the accusations made against Stapleton, a campaign spokesperson who agreed to speak on the condition they not be named admitted that Stapleton did not attend the May 3 PERA board meeting, but said a deputy called in to the meeting. The spokesperson said that wasn’t out of the ordinary, which one of the sources Denver7 spoke with confirmed.
And though another group that has focused on PERA’s liabilities and opposed Stapleton’s work on PERA in the past, Secure PERA, found that Stapleton attended 53 percent of board meetings from 2011 through 2016, a Denver7 review of board meeting minutes from 2017 show that Stapleton attended eight of the nine meetings that year, missing only one on the first day of a three-day retreat.
Only two of the five 2018 board meetings’ minutes have been posted to the PERA website so far – one of which Stapleton did not attend.
A PERA spokesperson referred questions about the PERA bill and Stapleton’s involvement to the bill’s sponsors. But in a news release issued after the bill passed, PERA said the deal "will reset PERA’s path to financial resilience, making the retirement fund stronger and more stable."
Stapleton’s spokesperson maintained that Stapleton has been a champion of PERA reforms, and like most of the lawmakers involved, said that though the deal reached wasn’t his “dream deal,” that it was “time to get something done.”
“He didn’t say, ‘We solved it; it’s fixed for good,’” the spokesperson said. “It’s shored up for now.”
Tate and Becker agreed that there will likely be tweaks made in the future, as the bill allows for more legislative oversight of the pension system and there are sure to be changes in the market.
Despite the disagreements about Stapleton’s involvement, those who Denver7 spoke with for this story were clear that while the legislative deal was a big step for the more-than 560,000 current and former public employees in Colorado, and contains protections for the future, when there will be a new governor and new leadership in the legislature.
“We’ll keep considering the feedback we’re going to get,” Becker said. “And whoever is the next governor will have feedback as well.”