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VA: Gutsy lawmakers could change state law to publish public pensions

By   /   October 1, 2012  /   1 Comment

By Kathryn Watson – Watchdog.org Virginia Bureau

ALEXANDRIA — State law seems to block Virginia from creating an online database of public employee pension payroll that could reveal anomalies like “double dippers” in the system.  

AT WHAT COST?: State lawmakers would have to change Virginia Code to allow for a searchable, online database of public retiree pension payroll.

A portion of Virginia Code called Government Data Collection and Dissemination Practices Act (2.2-3800) prohibits the state from making public information about who gets paid what out of the taxpayer-funded, seriously underfunded Virginia Retirement System. And, per the Virginia Freedom of Information Act, privacy exemptions protect such information from public requests, according to Virginia Attorney General Ken Cuccinelli’s office and the Virginia FOIA Advisory Council.

But, enterprising state lawmakers could always change the rule book.

“We change the law all the time,” said Maria Everett, who drafts FOIA-related legislation as executive director of the Virginia Freedom of Information Advisory Council.

Advocates of public pension transparency at George Mason University’s Mercatus Center say such databases — which lay out who received how much pension over what period of time — are one of the most effective ways to curtail corruption and reveal inconsistencies for the benefit of taxpayers and hard-working public employees. Other states with such databases are living proof, said Eileen Norcross, a senior research fellow with the Mercatus Center and a lead scholar on public-sector pensions.

“In California, in New York, in New Jersey where these databases have been put together, suddenly it comes to life that there is a cluster of employees who has been double dipping, or they’ve been bumping up their salaries and earning exorbitant amounts, which is out of sync with what other workers are getting,” said Norcross. “So, it allows people to sort of see those anomalies, and I think that’s very valuable.”

Instances of double dipping — collecting a pension from one government job while simultaneously earning a salary from another position — and salary spiking — earning significantly more than usual in one’s last year of work to boost pension benefits — are exactly the kinds of anomalies discovered in New Jersey with the help of such a database.

New Jersey Watchdog, Watchdog.org Virginia Bureau’s sister operation, reported that 1,244 state retirees collected more than $100,000 in pensions in 2011, among other anomalies. And to put icing on the proverbial cake, New Jersey Watchdog revealed a scandal in which New Jersey comptroller Matthew Boxer — the supposed state watchdog — was among those double dipping from the public coffer.

So, if these databases are so useful in catching those who may abuse the public’s trust, why hasn’t Virginia changed its laws already? For one thing, it may not be on legislators’ radars.

“I’ve never had anyone ask me why we didn’t publish the retirement benefits,” state Sen. John Watkins, R-Midlothian, who introduced a bill that became law in the 2012 general session requiring local government and school board employees to contribute to their pensions, told Watchdog.org Virginia Bureau.

“I’m a little anxious about adding more cost to that system until we get it back to when it’s stable,” added Watkins.

Watkins’ concern is the same one cited by the governor’s office and the Virginia Governmental Employees Association, which represents state employees and retirees.

Jeff Caldwell, spokesman for Gov. Bob McDonnell, said in an emailed statement that the governor “has not required the creation of an additional public database compiling this information due to the substantial cost and effort to create such a record.”

“The only argument against the retirement system doing it is the cost,” said Ron Jordan, VGEA executive director.

But Norcross and Jerry Britto, a senior research fellow at the Mercatus Center at George Mason University and director of its Technology Policy Program who co-authored a study on the cost of publishing state spending transparency programs online, said the cost argument doesn’t hold water.

“The thing is, they already have the systems in place, right?” said Britto. “In order to pay out, in this case, pensions, they need to know who the person is and how much money is owed to them, right? …  All they need to do is just make that data available online. There’s nothing difficult here about this.”

Bill Quinn, spokesman for the New Jersey Treasury Department, said New Jersey’s database didn’t require any new equipment or added expenses — just staff time from the IT and pensions and benefits departments.

“They had the information in a database format and they were able to adapt it to the website,” he told Watchdog.org Virginia Bureau. “They had to make some modifications, but of course they had the data.”

The cost objection is often the only believable front politicians can use to cover their real fears of actual transparency, Britto said. That’s what he discovered in his research on states’ efforts — and the inevitable pushback — to reporting expenditures online.

“Of course, a member of the legislature is never going to say, ‘well, we don’t want to pass this because if we pass this, people will know what we’re spending money on’,” said Britto. “No one would say that.”

How much would creating such a database cost? Virginia Retirement System spokeswoman Jeanne Chenault, who would communicate with Watchdog.org Virginia Bureau only via email, wouldn’t answer, citing only that state law prohibits such a database.

But Britto said the cost would be minimal. In the states he studied that published a comprehensive database of expenditures, creating the websites cost between $30,000 and $300,000 — far lower than original estimates as high as $1.2 million.

And in some states, the governments saved as much or more money than it spent on the databases, Britto said. In Texas, state workers realized that by placing one statewide order for printer toner instead of ordering by department, they could cover the cost of the database — roughly $300,000. And the state’s comptroller estimated that the database saved the state more than $5 million.

Norcross said a pension database could have similar effects.

“I think it lowers the cost for government, in the long run,” Norcross said.

Aside from cost, Jordan voiced concerns about employee privacy. Sure, the public has a right to know — but what about employees’ rights to privacy?

“Well, state employees, like anyone else, believe that their salary and their retirement payments are personal information, just like you wouldn’t want your salary or your pension published in the newspaper,” Jordan said.

Public pensions are murkier matters than salary data because, in some cases, employees put their own salary towards those pensions, Jordan said.

But Norcross countered that argument, too.

“They’re still getting paid by the government, so it’s still taxpayer dollars,” said Norcross. “… I mean, it’s being sliced up differently, in terms of it’s coming more from the employees’ paycheck than the government contribution, but it’s all tax dollars.”

Norcross argued that such a database is actually better for state workers drawing moderate or meager pensions. They can see who is milking the system.

If state legislators propose changes, they’ll have supporters?

“Generally, we encourage any kind of active publication that shows the spending of state dollars, and because pensions take up such a huge percentage of the budget, there should be some accountability into how that money is spent,” said Megan Rhyne, executive director for the Virginia Coalition for Open Government, a nonprofit alliance that advocates for the expansion of public access to government records.

Watkins wasn’t all on board with the proposal — but he said he wasn’t fully opposed to it either.

“I don’t know if I have any problem with making benefit payments public,” said Watkins.

Katie Watson can be reached at katie@olddominionwatchdog.org. 

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Kathryn Watson is an investigative reporter for Watchdog.org's Virginia Bureau. Her work has appeared in places like Drudge Report, Washington Examiner, Reason and Human Events, and she has made appearances on Fox News and NBC4. An alumna of the National Journalism Center, Katie is a member of Investigative Reporters Editors. She graduated with a journalism degree and highest honors from Biola University in L.A., where she ran the student newspaper. After college, she reported for a mid-sized newspaper in Santa Barbara, Calif. Her work has earned her "Best in Show" and two first-place awards from the Virginia Press Association.

  • heidihoneighbor

    Awesome! Lets start with the part-time Admiral that Norfolk just hired to encourage the military to live here, and the General that Portsmouth hired a few years ago to do the same.

    Taxpayers are tired (literally physically tired) of working to pay these people for nothing.

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