Mesa State bill moves forward

The Colorado Statesman

Democrats mounted a furious effort this week to defeat a bill that could allow Mesa State College to opt-out of the state personnel system.

House Bill 11-1007, sponsored by Rep. Laura Bradford, R-Grand Junction, survived the Democratic fight Wednesday morning and passed on a voice vote. It was approved on a straight party-line vote Thursday and now heads to the Senate, where it has an uncertain future.

Under HB 1007, the college’s president, Tim Foster, would allow the classified employees to hold an election on whether they want to be part of the state personnel system. Estimates on the number of employees involved vary from 105 to 120.

Democrats charged the bill was an attack on the state’s civil service system, one that was put in place to protect taxpayers from nepotism, and that the change would harm the Public Employees’ Retirement Association’s efforts to become solvent under Senate Bill 10-001.

Rep. Jim Kerr, R-Littleton, above, and Rep. Claire Levy, D-Boulder, below, are on opposite sides of HB 1007.

Bradford said the employees of Mesa State are the ones who want the option of choice, and caused laughter through the chamber when she claimed it was a “pro-choice” bill. An online poll, conducted by the college administration, showed that 74 percent of the employees supported having the choice. But Mesa State employees who testified against the bill last month claimed the issue caused “intense disagreement” among the classified employees and said there were concerns about intimidation and retribution for voting the wrong way on the poll.

Three Democrats were absent during the Wednesday morning debate, putting chances of getting the bill killed or even getting their amendments passed non-existent. But that didn’t stop them from trying: at least five amendments, some serious, some not-so-serious, were attempted. Rep. Mark Ferrandino, D-Denver, authored one that would require the college to divulge a list of its personnel who choose to opt-out, as well as their salaries and benefits costs. The amount of general fund provided to the college would then be reduced by that amount, the amendment said. Rep. Roger Wilson, D-Glenwood Springs, asked that the election be conducted by a neutral third-party, rather than by the administration. And Rep. Joe Miklosi, D-Denver, attempted an amendment that would allow new employees the option of going into the state personnel system.

Two amendments did make their way onto the bill, both from Bradford. The first dealt with the time period for the election (72 hours). The second addressed problems that opting-out could create for PERA’s solvency. According to PERA spokeswoman Katie Kaufmanis, PERA believed HB 1007 would have no impact assuming there were no changes in PERA membership. The bill allows those who opt-out of the state personnel system to stay in PERA, and the amendment offered by Bradford would allow an opt-in for new exempt employees.

Rep. Claire Levy, D-Boulder, said that even with the amendment on PERA, the bill will cause problems for its solvency. Classified employees at the college had said they believe they would have a better chance for raises as exempt employees, which Levy called a “false choice.” Levy also noted a 2006 state audit, reported last month by The Colorado Statesman that showed there was no evidence that a non-classified workforce was more cost effective.

The state personnel system was created in the constitution to protect employees from undue influence, Levy said. “It has served us well and we need to protect it.” Passing HB 1007 will open the door for more public colleges and universities to attempt the same thing, she explained.

The prime reason for the creation of the state personnel system was to protect the taxpayers, according to Rep. Dickey Lee Hullinghorst, D-Boulder, explaining that taxpayers contribute to the public universities, and Mesa State gets a lot of taxpayer money. The personnel system is in place to protect the taxpayers against corruption in hiring, she said, and “if you are an employee of the state, you must meet performance standards, and can’t engage in nepotism.” A college administrator just can’t hire anyone he wants and pay anything he wants, if the new hire happens “to be a good friend of yours.”

While Hullinghorst didn’t mention names, questions have been raised in newspapers and online blogs about some of the hiring at Mesa State. Since Foster was named its president in 2004, several well-connected Republicans have gotten jobs at the college. That includes former Sen. Ron Teck of Grand Junction; Kristi Pollard, the sister of then-Senate Minority Leader Josh Penry, as well as his wife, Jamie; and John Marshall, campaign manager for gubernatorial candidate and former U.S. Rep. Bob Beauprez, R-Colo. Rep. Steve King, R-Grand Junction, who is carrying HB 1007 in the Senate, was hired by the college on a contract basis in 2008 to audit its security plan. Derek Wagner, a former staffer for Sen. Wayne Allard, was hired in 2009 as director of special projects and strategic initiatives.

But it’s the impact of HB 1007 on PERA that had both sides battling, sometimes to Bradford’s consternation that such discussions failed to focus on the real issue, which she said is local control. Republicans insisted Wednesday that allowing Mesa’s employees out of the state personnel system, and out of PERA, “wouldn’t hurt PERA one bit.” But at the same time one Republican pointed out that PERA needs growth in the state personnel system to reach solvency. Rep. Jim Kerr, R-Littleton, who supports HB 1007, pointed out that PERA’s financial solvency, as outlined by its actuaries, is predicated on continued growth of state classified employment, at about 1.5 percent per year. “If we don’t have continued growth PERA will be in peril,” Kerr said, but added that the “incredibly small pool” of Mesa State employees leaving PERA wouldn’t hurt the pension plan. “It will have marginal, if any impact,” he said.

Mesa State’s PERA employees are enrolled in the plan’s state division, which had about 23,000 active members in 2010. In order to sustain the 1.5 percent growth required for solvency, that division would need to gain at least 345 employees per year.

Getting that growth will be much harder if other public colleges and universities follow Mesa State’s lead. There are an estimated 8,000 classified employees in higher education. According to figures provided recently by the Department of Personnel and Administration, the state’s public colleges and universities have been increasing exempted positions at a rapid rate since the passage of SB 04-007, which changed the definition of positions that could be exempted from the state personnel system. According to DPA figures, at the end of 2004, there were about 333 exempt employees, not including faculty or administration, in higher education. As of 2009, that number had increased by more than tenfold, to nearly 5,100.

Many exempted employees in higher ed don’t have PERA as an option. In 1992, the General Assembly passed a bill (SB 127) that allowed higher ed institutions to establish their own optional retirement plans (ORP) for faculty and exempt employees (the University of Colorado has had its own ORP for many decades). Since then, nine other institutions have started their own ORPs, and according to PERA, 40 to 50 percent of those eligible for the ORP switched from PERA to the ORP. According to the PERA fact sheet, the only institutions that still rely solely on PERA for their exempt and faculty employees are the Colorado School of Mines and all but one of the state’s community and junior colleges.

Is playing field a slippery slope?

While the impact on PERA from Mesa State might be small or even negligible, according to its supporters, The Statesman has learned that the “slippery slope” argument is gaining traction among Senate Democrats, in whose hands the bill’s fate now lies.

Bradford scoffed at the bill’s potential troubles in the Senate, telling The Statesman she believes it has the votes to pass. She pointed out that PERA has been “engaged in conversation” for several weeks regarding its issues, and that she did not view the bill as a “slippery slope” for other public colleges and universities to exit the state personnel system. Mesa State is “removed, geographically” from the rest of the state where “we manage things differently. We want control. There’s no way [HB 1007] is intended to influence other institutions” to do the same, she said.

Gov. John Hickenlooper has not taken a position on the bill, according to a spokesman.

The effort by Mesa State to shake loose of the state personnel system is not the only in the legislative hopper this week. On Thursday, the House Finance Committee is scheduled to take up HB 1187, which would exempt current contract employees from the state personnel system at Northeastern Junior College in Sterling.

That bill is not likely to get the same fight from Colorado WINS that HB 1007 got, according to Scott Wasserman, the union’s political director. Wasserman cited a need to focus on the larger effort for Mesa State.

The union’s attempt to block passage of HB 1007 is the first time it has publicly waded into what has been a controversial issue for higher ed classified employees since 2004: the exemption process. Classified employees in higher ed have claimed that the passage of SB 04-007 not only weakened the state personnel system, but it cut off avenues for career advancement for classified employees. Most lower-level classified employees in the statewide personnel system are supervised by higher-level classified employees. But in the wake of SB 7, those positions in higher ed are rapidly disappearing, along with the advancement opportunities: either through the employee’s choice to become exempt, because they were offered a one-time option to do so; or through the position becoming vacant and then exempted by the institution.

The University of Colorado’s lobbyist, Tanya Kelly-Bowry, acknowledged in 2005 in a meeting with the university’s staff council that “there is less opportunity for advancement [in higher ed] because upper-level positions are becoming exempt.”

Shortly after the bill’s passage in 2004, Miller Hudson, then director of the Colorado Association of Public Employees, told a statewide council of higher ed classified staff that the effort to exempt positions is about shifting salaries to the faculty. “They want to keep professors and Nobel Prize winners,” he said. “If we did away with classified employees in higher ed, in 10 years you’ll be paid 30 percent less than comparable positions in state government. This is a fight that’s worth fighting for,” he said.

Colorado WINS, the successor to CAPE, has never publicly attempted to overturn or modify SB 7, which has led to the exemption of thousands of classified and well-paid positions in higher ed, far more than would be impacted by HB 1007.

“Colorado WINS has been consistently opposed to the expansion of exemption powers in the state higher education system and has long argued that the personnel systems protects not only employees, but the taxpayer as well,” Wasserman said Thursday. He explained that the union has upheld this position at the Capitol (although he did not cite any legislative efforts to do so); and at the state personnel board “where individual grievance cases against exemption attempts are pending.”