Friday, August 15, 2008

Lawmakers & Pensions: The Rest of the Story

Today we were treated to Indianapolis Star's Matthew Tully's article on lavish legislators' pensions, which has contributions equal to 20% of the legislators' salaries, and offer immediate vesting.

It's an easy shot. Clearly the pensions are improper. Instead state legislators pensions should match state employees, including the amount of contributions and time period for vesting.

But an explanation is in order. Legislator's base pay is $11,600 and had not been raised since 1985. (It will go up to $22,600 starting in 2009. ) Neighboring Illinois pays its legislators a base salary of $63,143. How many of us would have gone 23 years without a pay raise? Whenever there is discussion of increasing their base pay, they unfairly get pummelled in the media, including by the Indianapolis Star. The Star makes their salaries look much bigger by lumping in daily expense money as if that were part of their income. While it's true that many Indianapolis area legislators do not have the expenses to consume all of the per diem, many legislators outside of Indianapolis have to pay for travel, hotel rooms, meals, etc. while they're staying away from home.

So instead of challenging the public and media backlash to raising their base salary over the years, legislators instead quietly increased their benefits. Was it the right thing to do? No. Compensation for legislators needs to be open and direct. It should not have to be "leaked" to the press in order to get it.

But the never ending backlash against legislators raising their base salaries is unfair as is the media's distortion of legislator's salaries. What would I recommend?

1) Instead of sneaking in pay increases through the back door (by increasing less noticed benefits), substantially increase the base pay for legislators. (This was finally done last session when pay was finally increased from $11,600 to $22,600)

2) Tie future increases of state legislator pay to state employees' pay increases

3) Have legislators' pensions match state employees' pensions in terms of
contributions and vesting. (Tully does an excellent job of pointing out how their pensions are better than state employees.)

4) Vary per diem expense money given to legislators by distance. If you live in Evansville you get more expense money than if you live in Indianapolis.

5) Full disclosure of all benefits paid by legislators.

Again, jumping on legislators for their pensions is easy. What is much more damaging to the public is legislators working second jobs that raise a conflict of interest with their legislative duties and their abuse of the franking privilege. Now that I'd like to see the Star cover. It would be a real service to the public.

1 comment:

Anonymous said...

4) Vary per diem expense money given to legislators by distance. If you live in Evansville you get more expense money than if you live in Indianapolis.

Sorry - per diem needs to be based on the city you are staying in - not the city that you come from.

On the other hand, if you live withing 100 miles of Indy - NO per diem. It can be that simple.