Massachusetts Governor vetoes MBTA retirement fund exemption

DeniedOn Friday, July 11, Massachusetts Governor Deval Patrick signed that state’s final 2015 budget. As part of his overall review and budget approval, the Governor chose to veto a provision that suggested the state’s Massachusetts Bay Transportation Authority (MBTA) retirement fund be exempted from the state’s existing public records laws. His position was that his desire is to see greater transparency in government, and that this exemption would be a step in the wrong direction.

Background

This veto may be a result of the more recent scrutiny placed on the management of the fund since its significant losses that were reported in late 2013. As rumors of the fund’s failed investments began to leak, news agencies began to request additional information on the fund through standard process public records requests. Those same agencies were surprised to find their requests denied or ignored, generally citing that the fund did not consider itself a public entity and was therefore not subject to the referenced law.

This opinion came as the result of changes to the Massachusetts definition of the term “public records” that were passed in 2013. In a variety of political maneuvers that have taken place since then, the state moved towards total transparency, enacting new legislation that required sweeping “open” access including holding open public meetings, complying with public records requests and adhering to agreed-upon conflict of interest rules.

However, as part of the budget negotiation process this year, legislators repealed that law in favor of more narrow disclosure requirements, primarily requiring the fund to disclose the recipients of public pension money and the amount of their pensions.

Governor Patrick’s veto signals his support of the original requirement for greater transparency.

How it Stacks Up to Other Public Pensions

One of the primary points at issue is standards to which other similar funds are held. For example, the state workers’ $60 billion pension fund discloses distributions to top recipients, shares monthly investment performance data and holds regular meetings that are open to the public. Some supports of greater transparency want the MBTA fund to follow suit.

One of the arguments against greater transparency came from the labor union to which many of the pension holders belong, stating that there is also a duty to protect privacy of members and directors and that must be considered alongside the desire for greater transparency.

Future Outlook

While Governor Patrick’s veto certainly sends a strong signal that the objective is for greater transparency, it will be interesting to see how this situation plays out as the governor leaves office and a new administration takes over.

Now, the issue seems to be that although there is an overall sense of agreement that greater transparency is valuable and necessary, there is substantial disagreement over exactly how to go about achieving a balance. Questions about how much information, what type of information, what specific information, and how and to whom to disclose will likely have to be discussed and agreed upon as the issue plays out in the coming months.