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The Politics of Pay

The Politics of Pay

7/24/2014

STATE LEGISLATURES MAGAZINE | JUly-August 2014

It’s clear that legislator compensation commissions help take the politics out of pay raises.

By Morgan Cullen

What’s up? Annual wages, export orders, business actitivy, state revenues, growth in GDP—all across the country.What’s not up? Lawmakers’ pay.

Legislative salaries have not kept pace with inflation for the past 25 years, and some states haven’t had an increase in decades. Louisiana’s legislators make $16,800 a year—the same salary since 1980. Lawmakers in Arizona receive $24,000 a year. They haven’t had a raise since 1999,  and the same is true for legislators in Colorado, Minnesota, New York and South Dakota.

Only nine states have increased salaries over the past 12 months, and in all of them, the primary responsibility for determining lawmakers’ salaries did not reside with the legislature.

The two states with the largest increases were California and Hawaii, which both have compensation commissions that determine legislator pay. In North Dakota, a nonpartisan staff agency sets salaries. The remaining six states that raised salaries this year tie them to various indexes for automatic adjustments.

Hawaii’s lawmakers received the largest increase when $11,579 was added to their previous $46,273 salary—a 25 percent increase. California legislators—the country’s highest paid—came in second, with a $4,765—or 5 percent—increase, giving members a total salary of $95,291 a year.

More Is Still Less

Californians may assume their legislators are screaming “Eureka!” with the raise. They may well be, but there’s more to the story. Before the Great Recession, California legislators earned $116,208 a year. But in 2009, with the state’s economy in a tailspin and annual state budget gaps exceeding 20 percent of the general fund, the state’s compensation commission cut salaries by $21,000—to $95,291 a year.

“California legislators were reducing staff salaries and issuing mandatory furloughs in an effort to reduce costs,” says Charles Murray, a member of the commission. “They didn’t have the authority to lower their own salaries, but we realized it needed to be done.” The trend continued last year, when salaries were cut further to $90,526 a year. California’s current compensation is still 18 percent less than what it was before the recession.

Automatically Unarguable

Other increases were marginal. For example, Indiana’s legislative salaries are set at 18 percent of judges’ salaries, so when judges received a raise this year, so did legislators—$1,523.70 to be exact. In Pennsylvania, where legislative salaries are tied to the Consumer Price Index, automatic adjustments upped lawmakers’ pay by $211. Other states with increases this year were Oregon ($336 a year), Rhode Island ($307.44 a year), Tennessee ($1,194 a year) and Vermont ($12.88 per session week).

The data raise questions about why none of the state legislatures with the authority to increase salaries did so, especially since a raise is so overdue in many states. Perhaps the most significant reason is the inevitable political fallout: Voters often feel that, since they can’t raise their own salaries, neither should their representatives at the state house be able to do so. The public’s low opinion of lawmakers’ job performance doesn’t help either. Legislators are all too aware of the political consequences of giving themselves a raise, even if it is fair and long overdue.

Commission Fruition

To help take the politics out of the issue, 24 states have created compensation commissions to provide independent and impartial recommendations. Most commissions convene every couple of years, review comparable salaries and benefits, provide an opportunity for public comment and issue formal recommendations.

The governor and legislative leaders usually nominate those who serve on the commission, but many states require that members come from different backgrounds and political parties to ensure a certain level of diversity.

Commissions’ authority and level of influence vary. Commissions in a few states have carte blanche to raise or lower salaries, but most don’t have that kind of power. Some serve in only an advisory role and make proposals the legislature can modify.

In other states, commission recommendations are binding unless the entire body of lawmakers or the governor vetoes them. And in Arizona and Nebraska, commission recommendations must be approved by voters before they can go into effect.

Why Bother?

  • Should lawmaking be a volunteer activity? If not, what would be a fair and decent wage? Should the wage be a factor in deciding whether to run? Why does it matter at all?
  • Maintaining adequate compensation levels may encourage more citizens to run and may help promote diversity among elected officials so the entire population is adequately represented.
  • Commissions offer legislatures an opportunity for independent and impartial recommendations on what would be fair compensation, and could even lead to raises that have eluded some state legislatures.

Morgan Cullen is a senior policy specialist with NCSL.

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