The (Colorado Springs) Gazette, Dec. 22, on pay raises for public employees:
Another day, another public employee demanding wages higher than most hard-working taxpayers can fathom.
Greg Smith is chief executive of Colorado’s financially troubled Public Employees’ Retirement Association. The fund performs so poorly it earned only 1.5 percent last year, and Smith chose to brag about it.
“We were able to achieve a positive return in an environment when a number of other public funds did not,” Smith said.
The pension is only 62.1 percent funded, with an unfunded liability of about $30 billion. It is trouble with a capital “T.”
Even if optimistic performance projections pan out, the fund could remain underfunded for most of the next 50 years.
By no definition can PERA be deemed a success.
Never mind all that, PERA’s board of trustees continues giving Smith raises and bonuses as if he’s scoring big returns. His base pay after Tuesday’s decision by the PERA board: $406,000.
The base does not include a 20 percent “incentive payment” the board approved at a cost of $79,000. It does not include a “retention award” of more than $200,000.
“Smith could be making nearly $900,000 in 2018 with his salary and total bonuses,” explains a story by Peter Marcus in Colorado Politics.com.
State Treasurer Walker Stapleton, an ex-officio, voting member of the PERA board of trustees, blasted the latest raise. He and two other trustees voted against it.
“It is unconscionable that Greg Smith will receive a 3 percent raise and 20 percent bonus for doing absolutely nothing to address PERA’s growing unfunded liability,” Stapleton said in a written statement. “This bonus is not tied to any performance. He is getting an extra 20 percent for simply showing up and maintaining the status quo. This is a prime example of all that is wrong with government.”
Exactly.
Smith should earn extraordinary wages for extraordinary results. We would not care if he earned millions a year, if his performance caused the pension to earn tens or hundreds of millions it would otherwise forgo.
The compensation paid to investment managers should relate directly to revenue their actions cause. Think sales commissions. No one minds when great salespeople get rich by taking reasonable commissions from transactions they finesse.
Smith has not provided hard-to-find leadership and taken PERA to a higher plane. Not even close. Under his watch, the pension has fallen far short of earnings projections. To lower expectations, PERA this month reduced anticipated returns from an unrealistic 7.5 percent to an unrealistic 7.25 percent. Maybe the fund’s shoddy performance is not Smith’s fault, but he should not be rewarded as if he righted the ship.
Smith’s latest raise comes just 16 months after the board raised his base 20 percent. Meanwhile, state employees - workers who count on the pension for their retirements - have not received raises since a 2.5 percent adjustment in 2014.
When Smith takes home nearly a million bucks in 2018, Coloradans should consider how others are paid:
-Stapleton, with an MBA from Harvard and a graduate degree from the London School of Economics, manages the state’s treasury for $68,500 a year.
-Colorado Gov. John Hickenlooper earns $90,000.
-Colorado Secretary of State Wayne Williams earns $68,500.
-Colorado’s median household income is $63,909.
-Colorado’s average teacher salary is $49,844.
No one deserves exorbitant compensation for “simply showing up,” as Walker described it. PERA’s director should achieve above-average results or receive average pay.
Editorial: https://bit.ly/2ipYtlp
___
The Greeley Tribune, Dec. 23, on the suspension of a major biogas factory:
We wish the Weld County commissioners didn’t have to suspend Heartland BioGas. But at this point we also think it’s the right move.
The biogas operation stinks. It stinks so bad, in fact, LaSalle residents who live near the plant have registered hundreds of complaints. Yes, this is a county known for odors, but we think that makes BioGas look even worse. Residents have complained for months in several other hearings (the first was in July) about headaches, nausea and having trouble sleeping. Odor problems are a serious health issue, not a spark plug for residents’ jokes, and we’re honestly a little disturbed it took the commissioners this long to act. As it turns out, this past week’s hearing revealed the company has broken nearly 10 state and county rules, including air quality regulations and permitting infractions. That’s ultimately what led commissioners to suspend operations.
Having said that, we’re glad the commissioners merely suspended operations, rather than shut it down completely. We think it’s a good compromise, even if residents were understandably disappointed. The move gives Heartland BioGas owners a chance to stop the odors and fix the violations.
We hope Heartland does so soon. Odors can be controlled. Many years ago, Greeley’s meatpacking plant had a few odor violations. ConAgra, the owners at the time, spent a lot of money, and those problems mostly went away. Heartland said it has spent $1 million to try to control the odor problems, and the owners hope to spend $3 million more.
We want Heartland to succeed. Dairy operators said Heartland is the one of the few, if the only, option available for getting rid of manure. And recycling officials said the company is doing great things by turning waste into energy.
The problem is, for now, the company isn’t doing so in a safe and fair manner. It’s making life miserable for many LaSalle residents, giving other businesses like these a bad name and taking way too much of our commissioners’ time.
We hope Heartland can reopen and start fresh. The first step to that is making sure the air around it stays fresh.
Editorial: https://bit.ly/2hvFwRy
___
The (Grand Junction) Daily Sentinel, Dec. 22, on the Taxpayer’s Bill of Rights:
When state lawmakers convene in Denver for the legislative session next month, they’ll have to deal with the boomerang effect of a bustling economy.
State forecasters told members of the Joint Budget Committee last week that the economic conditions are better than expected. The state will have about $216 million in unexpected additional revenues to start the next fiscal year July 1. But, thanks to the Taxpayer’s Bill of Rights, that money will push revenues beyond the limit of what state government is allowed to keep and spend. Revenues in excess of TABOR caps are supposed to be returned to taxpayers, even at the expense of underfunded schools and roads.
Expect some creative budget maneuvering - or at least some arguments - to allow the state to keep the money on the rationale that TABOR was never intended to result in the reduction of government services. That’s a position that local jurisdictions financed by property taxes should be taking, too.
Local governments haven’t been as bold as the Legislature in testing TABOR limits, even though they’re impacted equally, if not to a greater extent, by the 1992 law.
Before TABOR, property tax was a dependable source of revenue. Local governments could raise and drop levy mill rates to hit statutorily regulated revenue targets. Because of its dependability, property tax has been used to finance some of the most essential local government services: roads, schools and public safety.
But TABOR changed that - not in the law itself, but in the way the law is regarded by local officials. It stems from the wording of TABOR’s “mill levy limitation” subsection, which states: “…districts must have voter approval in advance for … any new tax, tax rate increase, mill levy above that for the prior year … or a tax policy change directly causing a net tax revenue gain to any district.”
When property values go up, a district’s mill levy must be lowered to comply with the TABOR property tax revenue limit. But when values go down, the mill levy can’t be increased without voter approval, even if the rate adjustment didn’t cause a net tax revenue gain.
At least that’s how most people interpret the law, perhaps cementing the “ratchet effect” unnecessarily. The Colorado Supreme Court has actually refused to adopt a rigid interpretation of the mill levy limitation which would have the “effect of working a reduction in government services.”
In other words, voters must approve an increase in dollars, not necessarily the rate a district uses to collect that amount. The court effectively provided latitude for districts to raise mill levy rates when values drop to maintain last year’s revenue - and avoid a reduction in services - without voter approval.
Unfortunately, it’ll take a cash-strapped district willing to risk an expensive, unpopular lawsuit to challenge the prevailing interpretation of TABOR’s mill levy limit.
Mesa County officials have shown no appetite to deviate from the popular notion of how TABOR works. How bad do things have to get before they consider a different interpretation provided by the Supreme Court itself?
Editorial: https://bit.ly/2ide7Rm
___
The Denver Post, Dec. 23, on addressing the impacts of climate change:
As America rolls into 2017, climate warriors on both sides prepare for battle. Before the fighting breaks out, it behooves the nation to reflect on where things stand in the final days of 2016. It was a complicated year for climate change and clean-air policy, though probably not a watershed one.
The worst news is that temperatures continue to increase - 2016 will likely be the warmest year on record, breaking the record for the third year in a row. Even if we just miss it, the upward trend of global temperatures overall continues at a perilous rate.
And as the planet sits a couple of degrees warmer than pre-industrial levels, real impacts are emerging. In Colorado it’s born out through diminished snowpack in the mountains, drought and heat-induced wildfires and pine beetles and now spruce beetles devastating our forests. Although 2016 was a great year in the state for precipitation, the EPA says April snowpack has declined by 23 percent over the past 61 years in the West in part due to warming temperatures.
Even more startling are changes at the top and bottom of the world. In the Arctic, water temperatures are as much as 9 degrees warmer than the 30-year average, and sea ice late in the year has been at a record minimum. In the Antarctic, glacial melting is happening at a startling rate, threatening unprecedented seal level rise.
Bad climate news isn’t always so obvious, though. This year, Volkswagen reached a settlement with its customers and the federal government over the company’s diesel cars that had illegally high emissions. VW will buy back most of the vehicles. The settlement includes a hefty payment to the Environmental Protection Agency to offset the negative impacts the emissions had.
The year had some climate bright spots.
The brightest was ratification of the Paris climate agreement. The United States joined with nearly 200 other countries in a commitment to limit temperature increases. No one country can solve the global threat of climate change. International collaboration and shared responsibility must be cornerstones of serious attempts to prevent catastrophic outcomes.
Meanwhile, President Barack Obama’s Clean Power Plan continues to promise overdue regulation to some of the worst polluters. Unfortunately, the whole thing is in limbo, thanks in no small part to opposition from officials in several states, including Colorado Attorney General Cynthia Coffman.
And Colorado’s Gov. John Hickenlooper will have to decide what to do with that draft executive order that was leaked in August. It would call for a 35 percent reduction in carbon dioxide emissions from power companies by 2030. That would be a big step for the state, but only if Hickenlooper can truly implement it in a way that wouldn’t mean job-killing cost increases for operators and pocketbook-breaking rate hikes for consumers.
The Environmental Protection Agency took clean air standards into its own hands this year, lowering the allowable levels of ozone. We thought the new standards, which are beyond the reach of Denver and much of the Front Range due to background levels of ozone settling here from other parts of the country, went too far. But that doesn’t mean we aren’t concerned with the quality of air in Denver and the health consequences of high ozone levels.
The world must come together to address climate change. No single city, state or country will reverse the man-made contributions to global warming or the advent of smog alone, but we also can’t sit on the sidelines and blame others for our current predicament.
Editorial: https://dpo.st/2ipWywT
Please read our comment policy before commenting.