Sen. Chris Holbert, R-Parker (CGA)
Sen. Chris Holbert has withdrawn his name as a prime sponsor of a bill by selling as much as $12 billion in bonds.
The Parker Republican said Friday he believes House Bill 1388 is too complex for lawmakers to digest in the waning days of the session and it should be introduced at the start of the 2016 session.
“If this is a good idea today then it ought to be a good idea next January. It is such a substantial bill. Let’s take the summer to talk this through, ask the tough questions, bring it back next year,” he said.
The bill was introduced in the House Tuesday, heard in committee Wednesday and debated on the House floor Thursday. The final vote is expected Friday. If it passes, it still must be heard in the Senate. The session ends Wednesday.
The other sponsors of the measure are Reps. Dan Pabon, D-Denver, and Bob Rankin, R-Carbondale, and Sen. Andy Kerr, D-Lakewood.
Holbert said the idea was presented to him as a way to reduce taxpayers’ liability regarding the Public Colorado Public Employees Retirement Association. PERA is only 64 percent fully funded. It could also reduce the time frame for full funding.
“People who I respect, who clearly understand pensions and investments, they can see good and bad with the bill. I’m not sure this is a good idea,” he said. “If people were going to consider voting for this in the House or Senate because my name was associated with it, I thought it best I remove myself from it as quickly as possible.”
Another PERA bill introduced this year involves Denver Public Schools. That measure died Wednesday .
Here’s what Denver Post reporter David Migoya wrote about that measure Holbert had been sponsoring:
A staggering $23 billion shortfall in the state’s public-employee pension system that was, in theory, fixed five years ago is the focus of renewed efforts that could put Colorado’s stellar credit rating on the line.
High-level discussions between state treasury officials and Colorado Public Employees’ Retirement Association executives have been underway for months, looking for a way to solve the shortfall faster than the 30 years it will take under legislation passed in 2010.
By selling as much as $12 billion in risky pension-obligation bonds tied to a fraction of the state’s future pension contributions, Colorado could conceivably earn millions of extra dollars on investments and close the funding gap more quickly.
POBs, as they are called, have a poor reputation in financial circles, yet proponents here say they are considering a unique repayment approach that would dampen any criticism.
Opponents say the danger to the state’s credit rating is simply too high — much less the risk to more than 532,000 retiree pensions — to even consider POBs. Markets fluctuate too much to guarantee returns, and a glitch in the economy similar to what happened in 2008 isn’t only likely, it’s inevitable, putting the state and PERA in peril.
