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Legislators: Please fix this!

August 29, 2015

What if the Michigan Legislature passed a law that said taxpayers had no right to know how much public employees are paid?

That is exactly what it has done for a major component of public employee compensation: the pension. Public employers are forbidden from releasing pension information by Section 20h (3) of Senate Bill 797, which became Public Act 347 of 2012. Section 20h (3) says (in part):

[I]nformation regarding the calculation of actual or estimated retirement benefits for members of the system is exempt from disclosure . . .

I'm sure most current legislators would be against denying access to pension information. Funding public employee pensions has become a huge burden for state and local governments as well as public schools. The unfunded liability for the city of Lansing's retiree pensions and health care, for example, may exceed $680 million, which amounts to $13,000 per Lansing household. The State Employees Retirement System (SERS) is underfunded by over $6 billion, the Public School Employees Retirement System (MPSERS) by over $25 billion. The whole subject of public employee pensions needs the attention of all of us, and denying access to the details of the pension calculation interferes with the public's understanding of the problem.

Many of our current legislators were not in office in 2012. Most of those who were probably were unaware of the provision in Senate Bill 797. The bill was an amendment of the Public Employee Retirement System Investment Act, Act 314 of 1965, whose summary is as follows:

An act to authorize the investment of assets of public employee retirement systems or plans created and established by the state or any political subdivision; to provide for the payment of certain costs and investment expenses; to authorize investment in variable rate interest loans; to define and limit the investments which may be made by an investment fiduciary with the assets of a public employee retirement system; and to prescribe the powers and duties of investment fiduciaries and certain state departments and officers.

Since Act 314 addresses the "investment of assets of public employee retirement systems," the provision denying public access to pension details for individual retirees was entirely out of place. No one expected it to be there and no one seems to have noticed. I wrote several pieces on it on this website and I found an article on a national site that borrowed from one of my stories, but I can find nothing on it in local or state news media.

 

I suspect that some weasel legislator slipped it into Senate Bill 797 at the request of public employee unions.

 

Legislators: You now have no excuse for letting stand this insult to the public's right to know. Please remove Section 20h (3)!

I have considered challenging in court the constitutionality of the pension detail exemption. The fact that it was tucked away in an unrelated bill alone may make it unconstitutional. Here is Article IV, Section 24 of the Michigan Constitution:

No law shall embrace more than one object, which shall be expressed in its title. No bill shall be altered or amended on its passage through either house so as to change its original purpose as determined by its total content and not alone by its title.

It may also violate Article IV, Section 25:

No law shall be revised, altered or amended by reference to its title only. The section or sections of the act altered or amended shall be re-enacted and published at length.

Section 25 appears to be saying that you can't amend a law without changing the law itself. In this case, if pension details are to be exempt from disclosure, it must say so in the Freedom of Information Act, and since Section 15.243 of the Freedom of Information Act consists of a long list of exemptions from disclosure, that would be its proper location rather than a statute that deals with retirement system investments. However, one of the items on the list is the following, which seems to contradict Article IV, Section 25:

Records or information specifically described and exempted from disclosure by statute.

The City of Lansing cited that exemption in denying my May 26 request for pension details for one of its retirees. However, that exemption is itself unconstitutional: any idiot knows a statute cannot override the Constitution.

 

Finally, Article IX, Section 23 says (in part):

All financial records, accountings, audit reports and other reports of public moneys shall be public records and open to inspection.

So I might be able to win a lawsuit. But why should I spend my time and my money when the Legislature is fully capable of correcting its mistakes?

Send comments, questions and tips to stevenrharry@gmail.com.

 

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