The South Carolina Legislature has done it again: It has passed a law that few legislators claim to know anything about and has brought darkness to an area of government where sunshine should prevail. In doing so, the Legislature has dropped a veil of secrecy over what the state pension system pays to retirees.
The Charleston Post and Courier reported Sunday that South Carolina taxpayers have no way of knowing who gets what when it comes to the state pension fund. The culprit is a 2008 state law that among many other things exempted state pension records from the state's Freedom of Information Act. That law, although more porous than it should be, is what stands between taxpayers and government secrecy by making public officials do their work in public and giving taxpayers access to all sorts of government information and records.
State pension systems across the country have fallen under more scrutiny in the past few years as many of them have been exposed for having serious funding deficiencies. Many of them, including the one in South Carolina, have billions of dollars of unfunded liabilities.
South Carolina retirees were paid more than $2.5 billion last year, reported The Post and Courier, but state taxpayers are locked out of what should be public data that says what specific individuals are getting. That's despite the state FOI law that already gives the public access to the salaries of public employees, by name, who make more than $50,000.
Former state Rep. Dan Cooper, who at the time was the chairman of the powerful House Ways and Means Committee, sponsored the 2008 bill that dealt with many factors involving the state retirement system's investment expectations and set guaranteed cost of living adjustments. Cooper, who resigned from office last year, defended the inclusion of the exemption of pension records by saying it "was primarily to protect people's privacy."
Cooper said state retirement officials tied the exclusion to the Health Insurance Portability and Accountability Act that creates privacy expectations for medical records. Jay Bender, an attorney for the S.C. Press Association, doubted the federal medical privacy law applied to state pension records. "If someone is getting a disability payment, I'm not sure how that's a medical record," he told the Charleston newspaper.
The bill's cosponsor, former S.C. Rep. William Cotty, told the reporter that he wasn't aware of the provision that blocked the public from seeing pension records but nonetheless he defended the practice by asking rhetorically, "Why does John Doe have a right to know what I receive of that share?"
John Doe has a right to know -- along with hundreds of thousands of taxpayers -- because they all are on the hook for helping make the public retirement system whole if it collapses because of bad political decisions. And state retirees, who also are taxpayers, have a right to know so they can be aware of any abuses that jeopardize their promised pensions. After all, those state retirees have paid faithfully into the retirement system and they deserve the protection of transparency, too.
Some states already have total transparency with state pension records, and as expected some interesting stories have surfaced. For example, one of the most outrageous stories has come from Illinois where a union boss legally earned a six-figure pension for working one day as a public school substitute teacher. And in that state, the Illinois comptroller draws a six-figure salary while collecting a six-figure pension from a different job she formerly held.
"While this is egregious, the real story is in the thousands of people doing this below the radar," Rae Ann McNeilly of Taxpayers United of America told the Charleston newspaper.
Gov. Mark Sanford, who had vetoed the 2008 law but did so not knowing about the exemption of state pension records, called the restriction "ridiculous" and said "it is in keeping with the relatively closed nature of the South Carolina political system that very jealously guards its prerogatives." He's right, of course.
The restriction, ostensibly slipped in with the awareness of only a few people, fits the bill for how the Legislature works. Bad decisions make it into law without embarrassing public debate, and the public is left in the dark about what is being done with tax dollars.
Once those indefensible decisions are revealed, elected officials fall all over themselves to get on the right side of the issue. That's happening right now with the closed pension records. Gov. Nikki Haley and four key state lawmakers have told the Charleston newspaper that they want to open the pension records that were closed -- on their watch -- in 2008.
The pension records should be made open. While lawmakers are rushing to do that in this election season, they also should reassure wary taxpayers that they are committed to much more openness in the law-making process so more bad laws aren't tucked away -- only to be discovered many years later.