Sunday, September 18, 2016
Blame it on the headline in the news release issued Sept. 13:
“Treasurer Josh Mandel and Ohio’s Public Pension Funds Announce Historic Launch of Online Checkbooks on OhioCheckbook.com.”
Those 16 words wishfully held out the promise of the shroud finally being lifted.
But it wasn’t just the headline that caused this writer to breeze through the
release in search of the Holy Grail. There was this statement from the leader of the largest public-pension
system in Ohio:
“A pension system that is responsible for the stewardship of the member and employer contributions must always operate in full view of the public. By contributing data to the Treasurer’s online checkbook, OPERS continues its 80-year legacy of transparency.”
Two words stood out in the statement from OPERS Executive Director Karen Carraher: employer contributions.
The employer is you, the private sector taxpayer. It’s your money that’s being used to boost the pensions of public sector employees.
For years, this writer has railed against the shroud that has kept private the pensions drawn by retired public employees in Ohio.
So when Ohio Treasurer Mandel announced last week that all five pension systems were posting their checkbook-level expenditures on his nationally recognized OhioCheckbook.com, it was a dream come through.
But a careful reading of the press release issued by Mandel made clear that the sleight-of-hand that is the hallmark of the public pension system continues.
None of your business
Private-sector taxpayers
will not be privy to the amount of money being raked in by retirees – even though they contributed to the pensions.
Treasurer Mandel has received high praise in this space for launching OhioCheckbook.com in 2014. He sent written invitations to 18,062 local government and school officials representing 3,962 entities throughout the state, calling on them to place their checkbook level data on the state site.
Mandel invited them to partner with his office at no cost to local governments.
What is noteworthy about the partnership is that the financial transactions available for public review online include payrolls. Mahoning
County is one of the four counties in Ohio that has joined Mandel’s transparency campaign.
With a click of the mouse, taxpayers can find out what public employees are earning. The information is
certainly revealing.
But to the point of last week’s announcement by Mandel and the heads of the five pension funds, it’s all fluff so long as we’re kept in the dark about how lucrative retirement from a government job can be.
Knowing what public employees earn in wages and benefits and how much they gobble up in retirement are the ultimate demonstration of transparency.
Given that so many have taken advantage of the
retire-rehire system, which is a financial bonanza, or that a significant number of elected officials retired
before their terms were up and then ran for re-election, the case can easily be made for full disclosure.
But as most astute taxpayers well know, state law
exempts public pension payments from Ohio’s
public records laws.
Therein lies the rub. We, the private sector taxpayers, contribute toward the pensions of government employees and others, and yet we are prohibited by law from knowing how much the retirees are receiving.
Only the General Assembly can right this public policy wrong, but since lawmakers are also in the pension system they have no reason to favor openness.
However, Treasurer Mandel, who has been criss-crossing the state touting his commitment to transparency, can take up the mantel on behalf of the people of the Ohio.
Absent that, taxpayers who are curious about what a retiree is earning must figure it out for themselves. The law permits the release of two pieces of information regarding personnel: one, whether an employee is retired; two, the salary at the time of retirement.
There is a formula that the pension system is only too happy to share with the public that can be used to calculate pensions.
The formula is as follows: The average of the three (or five) highest-paid years of public employment, multiplied by 2.2 percent, multiplied by the number of years employed.
Therefore, an officeholder earning $100,000 a year (six-figure salaries aren’t that rare in government) in his three highest-paid years with 30 years of service would get an annual retirement of about $66,000. He would also receive benefits such as healthcare.
The issue of public pensions bubbled to the surface a couple of years ago when a change in the cost-of-living adjustment went into effect. Instead of a flat 3 percent annual increase in retirement pay, members of OPERS got an adjustment based on the Consumer Price Index. That increase was about 1 percent this year.
That prompted a retirement rush so public employees could lock in the 3 percent for the foreseeable future.
It also gave rise to the creation of the big scam. Elected officials, including many in the Mahoning Valley, retired before their terms expired, but then ran (or are running) for re-election. The chances of an incumbent losing are slim to none.
Why the secrecy? Because the public sector can get away with it. Private sector taxpayers are so preoccupied with simply keeping their heads above water financially that they don’t have the time to test the level of accountability in government.
But there is one factor that comes into play: Elected officials either want to hold on their jobs or have their sights set on higher office. Therefore, they can be threatened into doing the right thing – and in the case of public pensions, the right thing is to remove the shroud of secrecy.