Sunday, November 26, 2006

Are Indiana Legislators Fairly Compensated?

There seems to be quite a bit of chatter among the mainstream media this past weekend that it may be time to consider a pay raise for Indiana's legislators. Marcia Oddi at the Indiana Law Blog wonders if this could be a coincidence. "So far I've read three stories today, from different parts of the state, all making a point that Indiana legislators are poorly paid," Oddi blogs today. At first blush, this seems like a no-brainer. Indiana lawmakers are paid only a base salary of $11,600, which has not been increased since 1985, more than 20 years ago. Of course it's time for a long-overdue pay raise you would think. But as Oddi points out, the situation is not exactly as it appears.

The $11,600, as it turns out, is just a small part of the compensation legislators are paid. They earn a per diem of $137, seven days a week during session. They also earn a per diem of $54.80, seven days a week during the rest of the year. While the base pay has not been adjusted since 1985, the per diem rate is periodically adjusted to take into account inflation. When you add the per diem pay to their base pay, the average legislator received $44,954 in compensation last year. The least amount anyone earned was $37,000. House Speaker Brian Bosma earned $50,964 with his extra pay as a legislative leader. In addition, legislators are reimbursed 44.5 cents per mile for travel expenses. They also receive a generous retirement benefit which provides a $4 match for every dollar a legislator contributes to his/her retirement account. Until recently, they also received very generous health insurance benefits for life. And let's not forget the most important point, Indiana legislators are considered part-time, citizen legislators.

It seems to me that Indiana's current compensation system is not at all transparent. Per diem pay is being systematically used and abused to boost legislative pay. Per diem pay should actually be paid only for those days when legislators are meeting in Indianapolis during session, and for other non-session days when legislators are required to attend an official legislative committee meeting. The purpose of per diem pay is to cover expenses for meals and lodging; however, even legislators from the Indianapolis area who return to their own homes every night are allowed to collect per diem pay, which seems to provide an unfair advantage for Indianapolis area legislators over those who must pay for their own lodging and meals (although the per diems are taxed at a higher rate for Indianapolis area legislators). Legislators often dine free while attending to legislative business at the expense of lobbyists, who are very generous in treating legislators to the best dining Indianapolis has to offer. Based upon the average compensation, it is clear that a per diem in one of the two forms is being collected by some legislators year-round.

As the system currently operates, it is very misleading to the public. Clearly, Indiana legislators are being compensated much better than the $11,600 base pay for what everyone claims is a part-time job. The current system is also quite generous to lawmakers who hold jobs where employers do not penalize them for time spent away tending to legislative business. Rep. Mike Murphy (R), who works for Anthem, and Rep. Bob Cherry (R), who works for Farm Bureau, are actually compensated to perform what sounds like government relations work for their respective employers. Several lawmakers, including House Speaker Pat Bauer (D), Rep. Craig Fry (D) and Rep. Bill Crawford (D) work in education and government-related jobs which pay quite well. Bauer, Fry and Crawford are all well-paid employees of Ivy Tech. They are what we commonly call "double-dippers."

When I first started getting involved in politics in Illinois in the late 1970s, state lawmakers there, who at the time were still viewed as part-time legislators, decided to boost their pay 40% during a lame-duck session following the 1978 election. The public uproar led to a citizen initiative to place a constitutional amendment on the ballot which cut the number of state representatives by one-third from 177 to 118. The ballot initiative was overwhelmingly approved by voters at the 1980 election. The so-called cutback amendment produced a full-time legislature. Legislators later sought to immunize themselves from voting on pay raises by creating a Compensation Review Board, which periodically set salaries for legislators and other state officials. The Board's recommendations became law unless both the House and Senate passed resolutions disapproving the raises. This produced a little dance routine where the House and Senate would trade off taking a bullet for not acting on the pay raise, thereby allowing it to become law. Even this system proved inadequate for Illinois' legislators. In the late 1980s, they added an additional stipend in the amount of $6,000 for any legislator who also served as a committee chairman or minority spokesman. After the stipend became law, legislative leaders created enough committees to ensure all lawmakers, except for those in the doghouse with leadership, earned a stipend.

Illinois just boosted its legislative pay again by 9%--in a lame-duck session. They now earn $63,143 in base pay. They also receive leadership stipends ranging from $9,612 to $25,576 in additional pay. They also receive a per diem of $125 for each day the legislature is in session, as well as mileage reimbursement. The average lawmaker is taking home at least $85,000 annually. Illinois legislators have a budget to finance district offices with full-time legislative staff. Illinois' legislative retirement benefits are also very generous.

It seems to me that, if Indiana legislators think they are undercompensated, they should begin by devising a more straight-forward system of pay than the current system, which by design makes their pay appear much less than what it actually is. Indiana should also consider whether it wants full-time or part-time legislators. The part-time legislators seem to be as susceptible to the influences of special interest groups as full-time legislators--perhaps even worse. In the end, pay doesn't seem to make a whole lot of difference. Members of Congress earn more than $160,000 a year, and that wasn't enough to stop former Rep. Randall Cunningham (R-CA) from accepting about $2.5 million in bribes or the numerous other recent cases of congressmen becoming entangled in unethical dealings with lobbyists.


Anonymous said...

Of course you're right, AI, but good luck getting America's worst state legislature to listen.

These geniuses are going to debate the Marriage Amendment, which affects so many of us so closely to home, in a month or so.

Their pay scheme invites so much cronyism and shadow corruption, it's ridiculous.

Senate President Pro Tem Garton used to classify himself a "professional speaker" and accept many off-session gigs from groups which lobby heavily. It was extra income he didn't have to report.

I personally don't care what they're paid, except: any pay increases hsould never go into effect until a differently-elected legislature is in session, and their entire pay and income should be disclosed.

As it is, we have a legislature full of public employees, lawyers and retirees.

Not exactly representative.

Anonymous said...

I posted this on the Star story:

Just found a WISH TV report on public wages for a few of our elected "leaders."

In Oct. of 2005:

Bauer was making $106,000 from Ivy Tech alone. Combine that with his statehouse pay, he makes $151,000 a year. How hard is it to live on $151,000 a year? I am sure there is just a good of person that can do the job, but is find with living frugal. Plus he has gotten the benefit of a 4-for-1 retirement plan.

Former Rep. Garton made $109,000 from Ivy Tech. So he made $154,000 a year PLUS life time healthcare PLUS a 4-for-1 retirement plan.

Craig Fry made $101,000 from Ivy Tech. So he made a combined income of $146,000 PLUS the 4-for-1 retirement plan.

Bill Crawford made $65,000. A combined income of $110,000. Plus all those nice benefits.

David Orentlicher teachers at Indiana Univ. He makes $135,000 just from IU. So a nice combined income of $180,000.

No wonder these guys did not want Mitch's tax on people who make over $ would include them. Funny how the Dem party always slams CEO pay, yet they rape the Indiana taxpayer. Sickening.

Anonymous said...

Garton started the Ivy Tech gravy train. And if I'm not mistaken, he didn't even have a college degree. Just a rare talent as a professional speaker, a pipe, and a calm demeanor. And a gavel.

The whole system is broken.

Orentlicher's pay is fair--if we want a citizen legislature. He's the brightest guy over there, and he teaches a full load at IUPUI in addition to legislative duties.

Hell for a period of time the state Republican Party's exec was a representative too. Talk about hacks.

Thing is, nobody sat in a big room and said, "Hmmmm. This may be a bad idea. Republican executive director as a legislator? Let's not do it. Wouldn't look good."

This posting, and other news stories about this subject, neglect to mention the freebies these folks get. Tickets to games. Meals. Tickets to the race, national "conferences." And the broad reporting categories on their Conflict of Interest statements, mean, effectively, that you'll never know the true influence level if those freebies cost $250.01 or more. It's all the same on those forms.

Harrison Ullman was right.

Anonymous said...


Things will be so much better once I am in control and [cue: thunder, lightning, echo reverb voice effects] I WILL ABOLISH ALL LEGISLATURES AND HAVE COMPLETE CONTROL!!!!

[cue: Vincent Price voice]

[The above is 98% sarcasm, substitute Bart Peterson for "I" and you'll be amazingly close to reality]

Anonymous said...

Hailstone wouldn't know reality if it whacked him over the snout with a rolled up newspaper.

The thread is about legislative pay-- not your personal beef with Peterson or Democrats.

I believe the origin of the citizen-legislator was to make sure that these people A) were in close contact with their constituents and B) had to live under the same laws they pass.

Although I agree with Gary that they should come up with a more straight-forward system and better reporting for lobbyist goodies -- htere is no way they will do that-- and expose the reality of the system.

And GOD FORBID they ever become a full-time legislature-- we don't want all those laws!

Anonymous said...

This is just a truth in advertising issue. The job pays $40,000 a year. Just say so. I know it might make for a tough vote for a legislator or two to go home and campaign on, but it's an important step.

Don't give different wages to Indianapolis legislators. That's a punishment to those individuals. Pay a salary, if you can't afford to cover costs (e.g. gas, lodging during session, cell phone bills, etc.) then don't run, but don't create a tiering of salaries, this will discourage candidates in Central Indiana.

If we give legislators a realistic salary, the need for the insane 4 to 1 match pension also goes away.

Anonymous said...

The thread is about legislative pay-- not your personal beef with Peterson or Democrats.

Seems this thread was more a slam on Bob Garton than anything.

And a full-time career legislator - would be a BAD thing. Using Gary's example of Illinois - where Speaker of the House's daughter is the AG, and the Gov's father in law is a Cook County Dem Machine hack. Too much political inbreeding there.

Anonymous said...

Harrison Ullman's tired line about Indiana having America's worst legislature wasn't true at the time he wrote it, and isn't true now. While the Indiana general assembly would never be mistaken for the first continental congress, they put in a decent showing compared to other legislatures in the US, or even in the Midwest. They deserve a lot of credit for passing a budget every year, even a couple of years ago when money was very tight.

Yeah, the marriage amendment is stupid, but it's not like is the only state wasting its time in this manner. Having said that, though, I should point out that the committee hearing on the amendment (at least in the senate) was carried on with a high degree of deference, decorum, and fairness for each side.

I do agree that the pay scale should be much more transparent - perhaps a $40,000 salary with pay increases linked to inflation or raises given to executive branch employees or something similar. Underpaying legislators isn't a good idea, since then only the wealthy become legislators.

I don't think that there's really a way to make the legislature representative, since most people don't have jobs that allow you to take off 4-6 months a year to do another job.