PERA, Colorado's Public Employee Retirement Association, is now the #1 financial issue (read: crisis) facing Colorado in 2018.
As a voice on the PERA board and the manager of our state's resources, the Colorado State Treasurer has the opportunity -- dare I say the responsibility -- to lead on actual PERA reform beginning immediately.
Here are the key truths that matter when we talk about PERA, and what I hold to as my PERA platform on this campaign:
- PERA should be a people issue, not a partisan one
- PERA affects all Coloradans, not only our public employees
- To reform PERA, we must be committed to HARD work, LONG term
- I'm running outside the "system", in order to bring objective change within the system
- We need immediate action items for real solutions
Friends, this is about you, the people of Colorado and we need to get to work immediately, with urgency.
This isn't stuffy policy "white papers" anymore: this is our state's credit literally on the line, this is what take home paychecks look like for elementary school teachers in real life, and it's about a sustainable healthy future for our State.
1. PERA should be a people issue far before it is a partisan one
A needed starting point we've yet to get to in Colorado and a key reason actual PERA solutions have yet to be seen: politicians are always making PERA only about politics.
PERA is an objective financial crisis and the sooner we can make this a people of Colorado problem instead of a Republican, or a Democrat problem, the sooner we will see real change happen.
Bad projections, unfunded liabilities, and lack of transparency are going to cause equal harm whoever you are - whether there is an R, D, or U behind your name.
PERA is important because it's deeply affecting real people: Coloradans who are school teachers, fire fighters, social workers, etc.
My plan and campaign are unique in this race as we start by demanding action on this foundation first and foremost. On behalf of the people instead of the political swamp.
2. PERA affects ALL Coloradans, not only our public employees
Because of PERA's $32 billion unfunded liability today (some estimates place it at even higher levels), Colorado's State credit rating risks an immediate downgrade. The effects of this are both deep and widespread for all Coloradans as our cost of borrowing increases and creates even harder gaps in properly fixing our roads (highway bonds), funding our schools, and more.
PERA is by FAR the State's largest debt and liability. In fact, it costs us $230 million in interest alone annually on our PERA debt.
Imagine how much better we could steward almost a quarter BILLION dollars per year as a State instead of burning it in interest for an insolvent PERA system?
This is the exact outlook and high standard I will bring to the State Treasurer's office.
3. To reform PERA, we must be committed to HARD work, LONG term
Here's the reality you won't hear from the politicians in this race: There is no silver bullet to making PERA solvent again. There is no easy overnight fix that we can pat ourselves on the back for as we return to other work. This isn't political platitudes and warm talking points work.
Colorado is desperate for a State Treasurer who is fully committed to the complex solutions and long term game plan fixing a $32 billion unfunded liability is going to require. As someone who came from humble means, started a company without a lot of money or any outside investors, who had to battle through the economic crash of 2008, and rebuilt my companies real estate holdings to almost $1 billion in 16 States throughout America today, I have had to be creative, determined, and focused on doing the hard work. This is the type of hard won experience and tenacity I will bring to the State Treasurer's Office, as I have been battled tested over many years of creating jobs, opportunity, and value for the people of Colorado.
I'm running for Treasurer to take my expertise in complex financial matters from my decades in business, now managing almost a $1 billion portfolio, providing returns to my investors, etc. to work as a true public servant.
This is what I have to deal with in the real world of business on a daily basis: hard, committed discipline to show up and get the actual job done. I don't blame others for not getting a job done, but rather work hard and smart every day to execute on investment plans. Knowing that your name/reputation, the livelihood of your employees, and the completion of needed work is constantly on the line. This is not work we can push off to tomorrow - I understand and live that.
4. I'm running outside the "system", in order to bring objective change within the system
One of the key tenets of my campaign is my promise to you not to take a salary from the government when elected as your next State Treasurer. I am doing this, as I want to save you the tax payer money, to reduce the costs of government, and because I always want to make a living from the private sector where most Coloradans have to make a living. I am the ONLY candidate in the race to do so and I am the only candidate who does not have a conflict because of it.
THIS IS IMPORTANT: Both PERA benefits and contributions are set not by the PERA Board but by the Colorado State Legislature. My main opponents, who are also talking about PERA reform, have spent *years* in the Colorado legislatures helping perpetuate the PERA problem they are claiming they want to "fix" as Treasurer. If they truly wanted to do so, then they should have done it in their current roles as State Representatives or State Senators.
We can do better - we MUST demand better. That is why I have committed to being a candidate in this race.
5. Immediate action items for real solutions
Building on the firm foundation outlined above, we can begin to act on the following steps:
Returns: Right now PERA is operating on a 7.25% return - an estimate they’ve never been able to regularly achieve. We need FAR better realistic predictions and expectations if we are going to be serious about reform. It is imperative we recognize that the best way to sustain PERA is by getting more money into the market and letting these market returns pay the benefits vs. relying on only contributions to accomplish that. The same way any retirement plan works. We must do this while also increasing contributions and/or decreasing future benefits in order to play catch up.
Benefits: Everyone must sacrifice here, while still protecting those who have paid in their whole lives (in other words, not affecting current retirees). This CANNOT just be placed as even more of a burden on the back's of us taxpayers alone - we should not allow it. This is how the real work gets done.
Retirement Age: People are living longer than we used to. Raise the retirement age, at least to match that of social security. Anything else would be out of line with realistic solutions and expectations.
Cost of Living: Reduce or freeze cost of living adjustments while extreme unfunded liability issues are being corrected.
Transparency and Accountability: PERA has yet to fully open their books. We must demand greater accountability and transparency with this basic, fundamental information if we expect to effectively serve Coloradans and accurately bring about solvency.
Develop a proper asset allocation: PERA lost 11% of its value in the economic crash of 2008, which was over $20 billion. We need to ensure that there is a proper asset allocation of PERA, to protect and grow what we have within conservative means. We should also make sure that a portion of these assets are being invested in Colorado, to create more jobs, opportunity, and growth for Colorado citizens.
Financial Training: We need to implement solid financial training for State Legislators, so they have a better understanding of what their political actions/decisions have on the people of Colorado. This can't be "politics as usual", as lives, jobs, families, and our quality of life are on the line. In addition, we should consider implementing a committee similar to the JBC (Joint Budget Committee) that specifically focuses on PERA, and make sure the PERA Board is comprised of people with considerable financial investment experience.
In sum, the Treasurer's race should be about strong leadership, good stewardship, and financial investment experience. This is not about the next political job, partisanship, or politics as usual. I am here to serve YOU, and to protect and grow the assets of Colorado, so we all can enjoy a brighter future together.