A bill to catch up on a missed payment to the Public Employees Retirement Association finally got through a critical committee hearing and a preliminary vote in the House Monday.

House Bill 1029, which has been awaiting action in the chamber since the first day of the 2022 session, is a recommendation from the legislature’s pension review commission to cover a 2020 payment that lawmakers put on ice, part of the state response to the pandemic and the recession that followed.

But opposition from the Joint Budget Committee – and potentially the governor – means the bill will cover the $225 million missed payment but not the $78 million in interest that PERA would accrue beginning in July 2020.  

The House Appropriations Committee Monday voted to put $225 million into a PERA cash fund, which brings that balance to $380 million.

According to Rep. Shannon Bird, D-Westminster, that amount will cover the $225 million owed, while $155 million will be prepayment for the General Assembly’s 2023-24 payment. 

In 2018, the General Assembly, in an effort to help PERA with its unfunded liability, pledged $225 million per year, plus additional contributions from employees enrolled in PERA, as well as their employers, which includes the state, the Denver Public Schools, local governments, judicial employees and teachers. That unfunded liability, as of June 2021, stood at $31 billion.

But in 2020, when the legislature planned to cut more than $3.4 billion in general fund dollars from the state’s 2020-21 budget, lawmakers put that PERA payment on ice.

The notion of paying interest – what would have been the fund’s investment gains – on top of the missed payment has not gone over well with some in legislative leadership. Sen. Dominick Moreno, D-Commerce City, then vice-chair of the Joint Budget Committee, spoke against covering the interest payment. Moreno’s position, which he explained in a December 2021 meeting of the the Legislative Council, is that no other budget cut to a state agency had been restored with funding exceeding the original cut. If the state took care of PERA’s interest payment, as well, other programs could make the case for missed opportunities or services not rendered, he said.

Bird, who advocated for the $78 million in interest payment, said Monday she understands the reasons behind not covering the interest. People raised the question on whether PERA had, in fact, taken a loss, and whether the system would accept less as a result, she said.

“I can understand why people would push back against it,” she said. “My perspective is when you have money available, that’s when you pay more down on your bills.” She is referring to the prepayment amount for next year.

House Minority Leader Hugh McKean, R-Loveland, also advocated for the interest payment.

“We gave our word. In tough times we bear the brunt; in good times, we share the good times,” he said, adding the state cut more money than it needed to in 2020. “Put it back, and with what it would have earned.” 

The House gave preliminary approval Monday to House Bill 1029; it will be up for a final House vote on Tuesday. It must win final House approval and then go through committee hearings and second reading in the Senate Tuesday in order to reach the finish line before the session adjourns on Wednesday.