Denver public schools Wednesday afternoon lost $20 million a year that would have funneled directly into classrooms.
The windfall would have come without lawmakers passing any new appropriations or tax hikes, but it was pushed back out of reach by three Republicans on the State Affairs committee. They voted down the money without a word of explanation at a breakneck end-of-legislative-session hearing.
No witnesses were called to testify against the bill. Committee Chair Ray Scott, a Grand Junction Republican, didn’t answer a message asking for comment. Nor did Senate President Bill Cadman, who assigned the bill, HB 1251, to the State Affairs committee, known as the “kill committee” — the place where the majority party in the Senate sends bills to die.
The bill was sponsored in the House by Denver Democrat Lois Court and Salida Republican Jim Wilson. It passed out of the lower chamber on a whopping bipartisan 55 to 9 vote. It was sponsored by Lakewood Democrat Andy Kerr in the Senate.
“This is a simple adjustment to the contribution rate the school system pays into the employee retirement fund,” Kerr explained to the committee. “We’re lowering it from 13.75 percent to 10.15 percent. The change would take effect immediately.”
The adjustment comes as a result of a legally required review written into the 2009 law that merged the Denver school system’s pension fund into the state’s Public Employees Retirement Association (PERA). The school system contributions and the viability of the funds, according to the 2009 law, must be reviewed every five years. This first review found that the Denver school system contributions were piling up ahead of schedule, especially compared to all of the other school districts in the state. At the current employer-contribution rate of 13.75 percent paid into the fund, the Denver system is on pace to reach full funding 15 years ahead of all the other school districts. Accountants who did the “true-up” review this year said that contribution rate was taking too much money out of the school system and so the rate could be safely lowered to 10.15 percent, putting more money on the table for students, teachers, equipment and counselors.
“We will still get to full funding five years ahead of other districts at the rate proposed in this bill,” said Denver schools Superintendent Tom Boasberg at the hearing. “The actuary for PERA was compelled by law to make this recommendation. This technical adjustment will have us pay the same as all other districts in the state. We’re paying too much now. Every school in the district is shortchanged two or three teachers — every one, in each and every school in the district.”
Nora Flood, the president of the Colorado League of Charter Schools, asked the committee to support the bill out of fairness to the district, to make good on the promise of the 2009 law and to do good for the schools.
“This would address disparities,” she said and then listed off how much the money would mean for certain of the district’s charter schools. “At GALS, it would mean $68,000 per year. That’s enough to pay another teacher’s salary. At ACE, a community challenge school, it would be $43,000. At STRIVE preparatory school it would be $660,000. That would pay for support and counselors.”
Chairman Scott told Boasberg that he read on the PERA website that the association was recommending a drop to a 12.6 percent rate, not 10.15 percent.
“Why would we vote to put you lower than that?” he asked.
Boasberg said the district and by extension the bill sponsors were open to any discussion about which rate was best.
“At that 12.6 rate,” he said, “we’ll still get to full funding 10 years ahead of all the other school districts.”
Estimates by accountants looking at the numbers suggested Denver could contribute less than the 10.15 percent rate proposed in the bill and still reach full pension funding levels before the other districts in the state. But the proposed rate is meant to equal the rate Denver pays with the rates paid by other districts.
In March, when House Republican sponsor Jim Wilson, R-Salida, introduced the bill in committee, he went out of his way to explain that it was not about general funding for PERA, which has been a flashpoint topic in the legislature for years. He said that Republican Treasurer Walker Stapleton, who has sounded repeat warnings about PERA’s finances, supported the bill and its proposed reduction in employer contributions.
“It’s important to point out that this bill is not a venue to launch into discussion about PERA’s unfunded liabilities,” Wilson said. “The state treasurer supports this bill, and everyone knows where he stands on PERA’s unfunded liability issues.”
Kerr kept his closing remarks at the hearing on Tuesday succinct. It was rounding on 4 p.m., and the committee was only halfway through its slate of bills.
“This was bipartisan, and it will make a big difference to the schools in Denver,” Kerr said.
But the vote was over in a flash.
Colorado Springs Republican Owen Hill, Sterling Republican Jerry Sonnenberg and Scott all voted nay.
Gone was the $20 million for the schools this year and for all the years until 2020, perhaps, when the next true-up review must be done.
Kerr didn’t answer a message last night asking for comment. But House sponsor Rep. Court did. I asked if she had heard what Republicans in the Senate didn’t like about the bill.
“In the House, it came to the Finance Committee,” she wrote in an email. “But it went to State Affairs in the Senate. Therefore, I can only surmise that the Senate leadership wanted it to fail. Sorry I can’t give you any more information.”
Photo by Brett Levin.