A Case for Affirmative Disclosure of Public Pensions

A Case for Affirmative Disclosure of Public Pensions

An appeals court has ruled that a public agency must hand over pension data to a newspaper. This is a welcome development but a recent case confirms that California remains far behind the curve on government transparency.

The Sacramento Bee has been conducting investigations into public employee pensions and finds that, during a time when public services are being cut, the pension bill for Sacramento County is $278 million, a full $60 million or about 27 percent more than five years ago. They wonder how particular pensions were calculated and seek information necessary for the detection of “fraud, spiking and other pension abuses.” But unlike CalPERS and other agencies, the Sacramento County Employees Retirement System (SCERS) would not hand over the information.

The Bee sued and the County fought them tooth and nail. A Superior Court Judge ruled against the secrecy gambit and SCERS sought to overturn that ruling. Now the Third Circuit Court of Appeals has ordered SCERS to pony up the names of pensioners, and the amounts they receive. That data might well pack some shock value, as another case shows.

The Salinas Valley Memorial Healthcare System, a public hospital district, paid chief executive Samuel Downing $668,000 a year and he draws a pension of $150,000. His board added $3.9 million in supplemental funds. Assemblyman Luis Alejo, a Watsonville Democrat, called the benefits “unconscionable,” and is on record that the Salinas hospital “had a history of not functioning with transparency.”

The Salinas Valley system says everything was conducted in open session and that the information has always been available. How much information is the key. The problem may stem from the state’s transparency laws, according to Lawrence J. McQuillan, author of PRI’s Bringing More Sunshine to California: How to Expand Open Government in the Golden State. The study finds that California ranks a lowly 45th out of 50 states for its open-meetings laws such as the Brown Act.

“The Brown Act should be amended to require that notice language be reasonably calculated to give notice to the public of what the governmental body will actually do in a forthcoming meeting, ” McQuillan says. “If a hospital district is considering giving a $4 million pension to an executive in the next meeting, the public notice on the web should say that. Saying ‘considering adjustment to compensation expenses’ doesn’t cut it.”

Bringing More Sunshine to California calls for “affirmative disclosure,” the open release of material by government as a matter of course, before any person, organization or newspaper asks for it. The reason should be obvious to all but the willfully blind.

“Public pay is the public’s business,” McQuillan said. “The state legislature should require the posting on a searchable website the salaries, benefits, business expenditures, and gifts for all public employees. Such affirmative disclosure would relieve the public of requesting this information on a piecemeal basis and having to fight uncooperative governmental agencies in court.”

The Bee says that “the public has every right to know how much the county pays in pensions to its retirees in total and who exactly gets how much in benefits.” A court case should not be necessary to get the information. In a time of service cutbacks, budget deficits, and a sluggish economy, all Californians deserve to know how many more Samuel Downing cases are out there.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.