Democratic gubernatorial candidate John Hickenlooper said Tuesday Colorado could tap part of the $33 billion state retirement fund for loans to small businesses, providing up to $150 million a year to help stabilize its economy.
Hickenlooper told workers at a prescription data center the state should use its assets for loans. He said the state could raise $100 million from investors and securitize about $50 million from the Public Employees Retirement Association to provide the loans.
“We would only use a small part of state retirement funds. It would have to be run like a business. This would provide access to capital they can’t get now,” Hickenlooper said.
Later Tuesday, at a debate sponsored by The Pueblo Chieftain, American Constitution Party candidate Tom Tancredo said the state should cut funding for PERA. Tancredo and GOP candidate Dan Maes said they don’t believe Hickenlooper’s plan will work because of PERA’s unfunded liabilities.
Accountants said in August the plan had net income of $5.2 billion last year after losing $11 billion the year before. The state cut retiree benefits to fix the problem over the next 30 years.
Maes has proposed using gaming funds or state lottery funds to provide loans.
Tancredo said the state will be forced to cut funding for PERA to cover an estimated $1.1 billion shortfall in state revenues next year. This year’s budget was $18.2 billion, and Tancredo said next year will see the first actual decline in state spending in 20 years instead of a cut in growth.
“We’re going to have to go after PERA, and we’re going to have to go after Medicaid,” Tancredo said.
Maes was counting on support from tea party activists in southern Colorado, but some activists are divided.
Becky Mizel, a Southern Colorado Tea Party board member, said Tuesday she was forced to take a leave from the board after she decided to campaign for Tancredo, saying Maes has been inconsistent in his stories about being a successful businessman and being an economic conservative. Maes says he never claimed to be a millionaire and says his experience in telecommunications and credit services will help the state.
Jerry Denney, also a board member, says he continues to back Maes even though Maes has waffled on three tax-limit measures on the November ballot.
“Those issues aren’t relevant to being governor,” he said.