Sunday, January 11, 2009

Alaska State Officers Compensation Commission Abandons Proposed Pay Raise For Sarah Palin, Presses On With Raises For Commissioners And Legislators

On January 11th, 2009, the Juneau Empire reports that the Alaska State Officers Compensation Commission, created by the Alaska State Legislature in 2008 to explore the feasibility of higher salaries for legislators, has backed off from a recommended $25,000 pay raise for Governor Sarah Palin, but is continuing with a recommended $15,000 average raise for legislators as well as an average $6,000 raise for the commissioners who head various branches of state government. Originally reported December 17th, 2008 by the Anchorage Daily News.

Another reason the legislature decided to create the Compensation Commission was because many lawmakers feared angering voters by deciding to raise their own salaries, so they instead chose to have a commission conduct the review to give themselves more protective cover and avoid backlash.

The original three recommendations of the Compensation Commission, as presented on December 17th in this previous post, included:

• Raising the governor's salary 20 percent, from $125,000 to $150,000.

• Raising the salary of the lieutenant governor and state commissioners to $135,000 a year. Lt. Gov. Sean Parnell currently makes $100,000 a year, while commissioners are paid between $122,640 to $127,240 a year, according to the commission's numbers.

• Giving all state legislators a flat annual salary of $50,400 while doing away with a per-diem lawmakers get for working on state business (known as long-term per diem) when the Legislature isn't in session. That would amount to an overall pay hike as well, based on lawmakers' pay in 2007. [Ed. Note: Based upon calculations posted toward the end, I've calculated the effect of this to be anywhere from a 5 to 10 percent pay raise, depending upon the individual lawmaker.]

The long-term per diem payments vary greatly, with some claiming payments for most days they're not in session, while a few claim nothing at all. The Compensation Commission said the average increase would be about $15,000 under their recommendation. Other legislator pay, such as session per diem, office expense accounts and travel reimbursement, would not be changed.

Neither the governor or department heads had sought the salary increases, and Palin announced she would reject an increase, although she later clarified that statement to mean she would donate the raise to a charity of her choice. With Palin uninterested in the raise, the commission abandoned its earlier proposal to raise her salary from $125,000 to $150,000.

Unlike recommendations made by other state committees, the Compensation Commission's recommendations are uniquely important because, after they are formally submitted by January 29th, they automatically become law unless the legislature passes a bill specifically rejecting them.

To understand how the compensation change will affect state legislators, we need to understand what their current entitlements are. At present, here's what lawmakers earn:

-- Base Salary: $24,012 per year.
-- Session Per Diem: $165 per day
-- Office Expenses: $10,000 per year for senators, $8,000 for representatives
-- Long-Term Per Diem: Variable
-- Moving and Lodging Expenses in Juneau: Variable
-- Travel Reimbursement: Variable

The Juneau Empire earlier calculated the total compensation of all state lawmakers for 2007 and posted it HERE. They defined compensation as the sum total of base salary, session per diem, office expenses, and long-term per diem. To better illustrate the impact of this proposed compensation change on state lawmakers, I have cross-posted below the 2007 information on selected lawmakers, then compared it to how much they would have received under the new system.

Rep. Sharon Cissna (D-Anchorage):

- What she actually received in 2007:
-- Base Salary: $24,012 per year.
-- Session Per Diem: $25,702 combined total for all sessions.
-- Office Expenses: $8,000 for representatives
-- Long-Term Per Diem: $18,150
- Grand Total: $75,864

- What she would have received under the new proposal:
-- Base Salary: $50,400 per year.
-- Session Per Diem: $25,702 combined total for all sessions.
-- Office Expenses: $8,000 for representatives
-- Long-Term Per Diem: None
- Grand Total: $84,102, a 10.9 percent increase

Sen. Bettye Davis (D-Anchorage):

- What she actually received in 2007:
-- Base Salary: $24,012 per year.
-- Session Per Diem: $25,702 combined total for all sessions.
-- Office Expenses: $10,000 for senators
-- Long-Term Per Diem: $20,100
- Grand Total: $79,814

- What she would have received under the new proposal:
-- Base Salary: $50,400 per year.
-- Session Per Diem: $25,702 combined total for all sessions.
-- Office Expenses: $10,000 for senators
-- Long-Term Per Diem: None
- Grand Total: $86,102, a 7.9 percent increase

The bottom line: What on the surface appears to be a windfall increase from $24,012 to $50,400 per year is sufficiently offset by the loss of long-term per diem to whittle the overall raise down to the neighborhood of 5 to 10 percent, depending upon the individual lawmaker. This is significantly more palatable.

Analysis: Public comment to the cited Juneau Empire story, a different Juneau Empire story, and the original Dec. 17 Anchorage Daily News story indicate strong opposition to any pay raises for elected officials. Obviously, offering Governor Palin a windfall raise of 20 percent during a recession was obscene, and she was wise to cut it off out of hand (it would have resulted in the governor's salary surging from $86,000 to $150,000 in just two years). But there is also no justification for giving a pay raise to commissioners.

However, it's been a long time since legislators have seen an increase in their base salary. Anna Fairclough once said that if Alaskans wanted a professional legislature, they would have to consider paying professional salaries. The total package only results in a relatively small overall compensation hike for legislators. So now that I've crunched the numbers, I can support it.

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