Evening star., 1938-10-23
COLORADO WEIGHS
PENSION REPEAL
Politicians Alarmed, While
Court Decision May Cause
State Bankruptcy.
BY JAY G. HAYDEN.

ny Jh1 ". MA DEN.
DENVER, Oct. % (NANA).-El-
derly couples, eligible for old-age pen
sions, receiving $500. while younger
heads Of families, unemployable be-
cause of illness or other causes, re-
celved SAB during the past year, pre-
sent only one Of the many anomalies
Of the Colorado pension situation.
A constitutional amendment, placed
on the statute books by the voters in
1896, requires the State to pay $45
q month to every one, man or wom-
an, 60 years old or over, who quail
fies as an old-age pensioner. The
only requirement of need contained
In the amendment is that a PEN
sioners net income from other sources
must be deducted from the pension.
Real estate used as a residence or
personal property exempted from exc
cution or attachment is not counted
in computing wealth of the applicant.
The amendment earmarked IS per
cent of the existing 2 per cent sales
tax revenue, all State liquor taxes and
any future excise taxes that may be
enacted; 10 per cent of all inheritance
taxes and incorporation fees and
number of lesser tax items for the
old-age pension fund.
Finally, there is Jackpot" pro-
vision that requires any moneys raised
from these specified levies, in excess
of the amount needed to meet pen
sion payments, to be paid to the pen
sioners pro-rata as bonus at the
end of each year.
Eliminates Relief Fund.
Apparently there was no mention
In the campaign preceding adoption
of the amendment of the fact that
the sales and liquor taxes, designated
for its support, already were being
used principally for unemployment
relief. Hence the almost complete
elimination of the State relief fund in
behalf of the pensioners.
The only saving feature in this re-
gard is that a beneficent Uncle Sam
has been extremely liberal in w. P. A.
allowances for Colorado, thereby TAX
ing over a considerable number of
the previous State reliefers.
The first difficulty the pension plan
confronted came when the Legisla-
ture attempted to draft an enabling
act which would satisfy the Social
Security Board at Washington. The
Federal Board could not match any
payments in excess of SIS month,
nor could it contribute to pensioners
under the age Of IS. Also there was
difficulty because the Colorado plan
provided for no substantial proof of
need to establish pension eligibility.
For seven months, the Legislature
labored over these problems before it
finally passed law in September, 1887,
which got the new system under way.
Drew $3.50, 900 Bonus.
In the meantime, taxes allotted to
pensions had been piling up and there
was the Jackpot" provision which in
sured the pensioners against ultimate
loss. In its first three months of
operation, the pension plan not only
paid all that was expected from it-an
average of $39 per month to some
$4,000 recipients-but on January l,
1888, the pensioners drew down
bonuses totaling s966,000, representing
all that remained in the fund as of that
date
But since this initial pension bo-
nanza, things haven't been going so
well. Tax collections proved insuf6-
cient to meet requirements and pen
sions have steadily dwindled until to-
day they average only about $25 per
month, substantially less than would
be received by pensioners over IS under
a full application Of the Federal
matching provision.
Pensioners have won lower court
decision requiring payment to them
Of $7,500,000 arrears, and this ruling,
If it is sustained by the State Supreme
Court, before which it is now pending,
would render the State bankrupt.
In an effort to save the State from
this plight, an organization of citizens
has been formed, calling itself the AS
sociation for Workable Old-Age
Pension" which has obtained the
necessary initiatory petition for a vote
at the coming election on repeal of
the whole system.
Politicians Avoiding Issue.
Such is the background of fact be-
hind the most bitterly contested po-
litical campaign Colorado has ever
known. On the one hand are arrayed
the $4,000 pension eligibles, and, nu-
merically more important, it is said,
the children or other relatives of these
who stand to be relieved of their sup
port by the State. The repeal advo-
Gates, on their side, are attempting
to arouse the taxpayers, including the
multitude of small consumers who al
most certainly will have their present
2 per cent sales tax doubled if the
State is required to meet fully pensions
as now provided.
A remarkable feature of this battle,
and an evidence perhaps that it is
exceedingly close, is that the politicians
Of both parties appear to be doing
their best to avoid any commitment
for or against the pension amendment.
Gov. Teller Ammons early declared
himself in favor of continuation of
the system in order to obviate an at
tack which the pensioners were threat
ening to make against him because he
has not provided the money to meet
payments already overdue All that
the Republican nominee for Governor,
Ralph L. Carr. has said is that if he
is elected, and the constitutional pro-
vision is not repealed, he will find the
money to meet its requirements. At
the same time, both of these candidates
are deploring the present high taxes
and promising to work for their re-
duction.
Politicians Are Alarmed.
Talk with the politicians privately
discloses that all of them, Republicans
or Democrats, are alarmed by the
political machine which has been built
up in the name Of old-age pensions.
They are saying that. if the present
constitutional provision is reratified