Amendment 66 & PERA

Some opponents charge that money raised by Amendment 66 will be diverted to “backfill” an “unfunded pension liability” at the Public Employees’ Retirement Association (PERA) rather than go to support students in the classroom.

A thorough review of the text of Amendment 66 as well as the “new” School Finance Act (SB13-213) and the laws governing PERA shows that charge to be absolutely false and without any factual basis. In fact, state law clearly prohibits the use of any Amendment 66 revenues to “backfill” PERA.

PERA is the retirement system for state and local government employees, including teachers. It is the only retirement program for these employees, virtually all of whom do not participate in or receive Social Security benefits. Money from Amendment 66 can be used only to supplement existing education spending, so the additional amount that would go to PERA is limited to mandated contributions for newly hired teachers or other staff members or for increases in salaries.

Thus, only that portion of Amendment 66 funds used to pay retirement benefits for those who are hired or who receive increased compensation as a result of the reforms enacted under the amendment will legally end up in PERA accounts.

This brief reviews the legal provisions contained in Amendment 66, the Colorado Constitution, and state statutes that dictate how education funds can be used. It also reviews the statutes governing the Public Employees’ Retirement Association that prescribe who must contribute, and how much, to the retirement system.

Ultimately, the Bell’s analysis concludes only the portion of the funds used to pay the mandated retirement contribution for new employees or those who receive raises will go to PERA. State law is very clear that the money cannot be used in any other way, therefore, the charge some opponents have brought to the table is absolutely false. You can learn more in the brief, with analysis from the Bell’s Director of Policy and Research Rich Jones.