Legislators take modest pay cut, with nominal results
Editor’s Note: Jon Margolis, a.k.a. the Vermont News Guy, is the author of this news commentary. Margolis will be producing original analysis pieces on occasion for Vtdigger.org.
Sometime this week, the 30-member state Senate, perhaps unanimously as the House did Friday, will vote to cut senators’ salaries by 5 percent, thereby saving the state treasury, and hence the taxpayers, something like $105,000.
The “something like” is necessary because most legislators don’t get annual salaries. They get paid only for the weeks they are in session, so the longer the session lasts, the more they earn.
In this case, that means the longer the session lasts the more the pay cut would “save” even as the lawmakers earned more in the aggregate.
The weekly rate is now $637; 5 percent of which is $31.83, so the pay cut will bring down the total salary to $605 a week, or about $10,890 per lawmaker over the course of an 18-week session.
Multiply that $31.83 by 178 legislators, and the savings works out to $5,666 a week. Now assume the usual 18-week session. And the total saved comes to $101,983.
But that’s not all, as a famous cat once said. The two legislative leaders, the speaker of the House and the president pro-tem of the Senate, rake in bigger bucks — $704.70-a-week each, plus an annual salary of $10,895 each. Their combined weekly salary comes to $1,409. Together, their weekly pay is $25,369 for an 18-week session. Add in their combined annual salaries of $21,790, and together their total pay comes to $47,159.
Five percent of that is $2,358. Add that to the $101,983, and you get $104, 341 (rounding off to the nearest penny), which is close enough to “something like $105,000” for government work.
Not a bad piece of change, a hundred and five large. Most Vermonters could live on it comfortably for a year or even two.
On the other hand, at about one-tenth of 1 percent of the Fiscal Year 2011 projected $151 million budget deficit, its actual fiscal impact could be described as something between tiny and inconsequential, which lends some support to Rep. David Zuckerman’s contention that the value of the pay cut was political and symbolic, not budgetary.
“We’re doing this to put out there that we’re taking the pain,” he said. “It works well from a political perspective.”
Zuckerman, a Burlington Progressive, was the only legislator to express outright opposition to the pay cut, though it wasn’t very strong; he voted for the 70-page Budget Adjustment bill (H.534) in which the salary reduction was one small sentence.
Another lawmaker, Democrat Kenneth W. Atkins of Winooski, said he would not oppose the pay cut because state workers had just accepted lower pay. But he agreed with Zuckerman that lawmakers “earn less than the average working wage in Vermont,” and are by no means overpaid. He referred to a 2004 study on legislative pay by the Snelling Center which concluded that lawmakers should get higher salaries.
Pointing out that legislators get no health insurance or retirement plan, Atkins also refuted what he called the common misconception that they get subsidies for using their home phones, or free auto registration and license plates.
“Not true,” he said. “No one is here for the money.”
Whenever a Legislative session drags on for a week or two, letters to the editor and news reporters suggest that lawmakers want the extra weeks for extra pay.
Besides, senators and representatives get more than their salaries. They also get expense allowances for travel, meals, and lodging. Aren’t these payments also part of their total compensation?
No. Economists consider salary, deferred benefits, stock options, and an employer’s share of fringe benefits (health care, retirement plans) to be compensation. Reimbursement for expenses, whether in an itemized system or as per diem allowances, are not part of compensation.
Legislators get per diem allowances, and they do not set their own rates. The federal government does. Nathan Lavery of the Legislature’s Joint Fiscal Office said the state uses the U.S. General Service Administration’s travel expense rates. Those rates are computed for each locality, Lavery said, so that, for instance, Vermont legislators don’t get Manhattan hotel rate reimbursements for staying in Montpelier hotels.
For this year, the meals and lodgings reimbursement rates were increased from $54 and $93 a day to $61 and $101, respectively. The mileage rate, on the other hand, reflecting lower gasoline prices, fell from 55 to 50 cents per mile. A lawmaker could easily rack up more than his or her salary, in lodgings ($9,000 or more), and food ($4,590). Legislators pass almost all that money to hotels and restaurants. A few lawmakers may end up with a small surplus from their expense allowances, and a few probably spend more than the per diem allotment.
Even for the most frugal, the reimbursement rates don’t appear to provide an opportunity for lawmakers to rake in big bucks. Legislators get a special $85-a-night rate at the Capitol Plaza Hotel near the Statehouse. Add in the 9 percent rooms and meals tax and their total is $92.65, giving them an $8.35-a-night “profit.”
That’s probably soaked up by the unpaid phone calls, car trips, restaurant meals and occasional hotel bills the lawmakers spend – and for which they are not compensated – while the Legislature is not in session. Not to mention the time that could be spent doing something more immediately useful to them, like making money. They get a $118 per diem for official legislative meetings (which is subject to the 5 percent cut), but only if they actually attend them (and the Legislative Council checks).
While no one can prove or disprove that members of the Legislature are “in it for the money,” it does seem that anyone who is in it for the money lacks either the incentive or the intelligence or both to deserve getting elected. Putting the same thought and effort into another enterprise would likely prove far more remunerative. No doubt over the years a few lawmakers have plotted their travels and meals to cadge a few extra dollars from the system. For the most part, they could have earned more putting that time and effort into honest work.
There are also, of course, what might be called the secondary economic benefits of serving in the Legislature, almost all of whose members earn most of their money in other pursuits. A lawyer, accountant, or other professional can make contacts and get publicity that can help bring in clients and customers. The business executive who lobbies a legislator today might offer him or her a high-salary position tomorrow.
To use the office for personal gain, then, the smart lawmaker will stick to doing the job right, and not spend time trying to eke a few extra bucks out of the rooms and meals allowance.
