Legislature(2007 - 2008)BELTZ 211

02/26/2008 09:00 AM Senate STATE AFFAIRS


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= HB 260 STATE OFFICERS COMPENSATION COMMISSION TELECONFERENCED
Moved CSHB 260(STA) Out of Committee
+ SB 181 ANATOMICAL GIFTS TELECONFERENCED
Heard & Held
*+ SJR 12 CRUISE SHIP PORT TIMES: JONES ACT TELECONFERENCED
Scheduled But Not Heard
+ Bills Previously Heard/Scheduled TELECONFERENCED
         HB 260-STATE OFFICERS COMPENSATION COMMISSION                                                                      
                                                                                                                              
CHAIR MCGUIRE announced the consideration  of HB 260. [Before the                                                               
committee was CSHB 260(STA).]                                                                                                   
                                                                                                                                
9:07:09 AM                                                                                                                    
KARL   KURTZ,   Researcher,    National   Conference   of   State                                                               
Legislatures (NCSL),  Washington D.C.,  said he  does not  take a                                                               
position  on  HB 260  but  will  give perspective  on  legislator                                                               
salaries and compensation commissions  throughout the country. It                                                               
is not  easy to estimate  salaries for state  legislators because                                                               
there  are per  diem payments  and other  payments to  get around                                                               
constitutional limits  in salaries.  There is also  the political                                                               
issue  of legislators  raising their  own salaries.  He tries  to                                                               
figure out  what the IRS requires  taxes on, so in  his estimates                                                               
he includes  salary, unvouchered expense payments,  and per diem.                                                               
He excludes leadership and committee chair compensation.                                                                        
                                                                                                                                
9:10:12 AM                                                                                                                    
SENATOR FRENCH asked what an unvouchered expense is.                                                                            
                                                                                                                                
MR.  KURTZ said  some  states offer  office  expenses that  don't                                                               
require  submission of  a voucher  so the  money can  be used  as                                                               
income.  He then  referred to  a map  of the  states showing  the                                                               
estimates of  what legislators are  paid. There are  seven states                                                               
that pay  legislators over $60,000  per year. Another  seven pays                                                               
$45,000 to  $60,000. Alaska  falls into  the middle  with between                                                               
$30,000  and  $45,000.  Eleven states  pay  between  $15,000  and                                                               
$30,000. There  are nine states  that pay less than  $15,000. New                                                               
Hampshire legislators get $100 per year. The ranges are broad.                                                                  
                                                                                                                                
SENATOR BUNDE asked  if he included the regular  salary of Alaska                                                               
legislators plus the long-term per diem.                                                                                        
                                                                                                                                
MR.  KURTZ   said  Alaska's   director  of   Legislative  Affairs                                                               
estimates an average of $33,000 for Alaska legislators.                                                                         
                                                                                                                                
9:13:29 AM                                                                                                                    
SENATOR BUNDE said that number  probably includes legislators who                                                               
claim no long-term per diem and  others who claim it nearly every                                                               
day. He asked if that per diem is considered as salary.                                                                         
                                                                                                                                
MR. KURTZ  said yes, and  that emphasizes  the fact that  all the                                                               
numbers are estimated averages. The  next map divides states into                                                               
three  levels of  "professionalization." Some  states have  full-                                                               
time  legislators with  compensation to  allow them  not to  work                                                               
outside the office.  They also have a large staff,  and there are                                                               
ten  states  in  that  category. There  are  16  classic  citizen                                                               
legislatures  including  New  Hampshire  and most  of  the  Rocky                                                               
Mountain States, and  they are very part time, have  low pay, and                                                               
have  very few  staff. Almost  half of  the states  are a  hybrid                                                               
between the two. Alaska is in that category.                                                                                    
                                                                                                                                
9:16:51 AM                                                                                                                    
MR.  KURTZ referred  to a  list of  compensation. The  average is                                                               
close to $40,000  in the hybrid category, and Alaska  is close to                                                               
that.  The highest  paid category  averages  $75,000. There  have                                                               
been  substantial   pay  increases  in  each   category,  but  by                                                               
correcting for  inflation, Congress has  had cuts and  the states                                                               
have stayed  about the same. Alaska  has had pay cuts  since 1972                                                               
based   on  inflation.   In  most   states  the   legislature  is                                                               
responsible for  setting their own  salaries. Most states  do not                                                               
have a salary commission. His  map is color-coded, and the darker                                                               
the color  the more  the legislature  has the  responsibility for                                                               
its salary. The salmon-colored states  have commissions that make                                                               
salary recommendations,  and then the legislature  votes on them.                                                               
The third  category (pink)  shows states  that have  a commission                                                               
that can act,  but the legislature, governor, or  voters have the                                                               
right to reject  the decisions of the  commission. He understands                                                               
that HB 260 is similar.                                                                                                         
                                                                                                                                
9:21:26 AM                                                                                                                    
MR.  KURTZ said  the fourth  category of  states ties  legislator                                                               
salaries  to some  type of  index,  like an  economic index.  The                                                               
salaries are  thus automatic. Washington  State has  a commission                                                               
that sets  salaries every two years,  and the only way  to change                                                               
it is with a voter initiative of the people.                                                                                    
                                                                                                                                
SENATOR  STEVENS said  there have  been enormous  ethical issues,                                                               
lawsuits,  and prison  terms in  Alaska. He  asked if  a lack  of                                                               
ethics is tied to unfair compensation.                                                                                          
                                                                                                                                
MR. KURTZ said that would be  difficult to prove. Congress is the                                                               
only body  that bans  all outside income.  That is  the principle                                                               
that  allows  them  to  pay  enough,  and  Congress  has  ethical                                                               
problems. He  doesn't think  a correlation  can be  drawn between                                                               
corruption and pay.                                                                                                             
                                                                                                                                
9:24:58 AM                                                                                                                    
CHAIR MCGUIRE asked if California bans outside income.                                                                          
                                                                                                                                
MR. KURTZ said no,  but it may have a ban  on honoraria. A farmer                                                               
or attorney, for example, can still earn their incomes.                                                                         
                                                                                                                                
9:25:46 AM                                                                                                                    
SENATOR BUNDE moved Amendment  1, labeled 25-LS0659\K.3, Bullard,                                                               
2/25/08, as follows:                                                                                                            
                                                                                                                                
   Page 2, line 1, following "place of":                                                                                        
        Insert "permanent"                                                                                                  
                                                                                                                                
   Page 2, line 4, following "allowance":                                                                                       
        Insert ", except that those whose place of permanent                                                                
   residence is  within 50  miles of  a location  in which  the                                                             
   legislature is convened  in regular or  special session  are                                                             
   not entitled to a per diem allowance for that session"                                                                   
                                                                                                                                
   Page 2, lines 6 - 7:                                                                                                         
        Delete "applicable to all legislators"                                                                                  
        Insert "[APPLICABLE TO ALL LEGISLATORS]"                                                                                
                                                                                                                                
   Page 2, line 10, following "council.":                                                                                       
        Insert "The policy may not provide for the                                                                          
   reimbursement  of   moving   expenses  or   per   diem   for                                                             
   legislators whose place of residence  is within 50 miles  of                                                             
   a location in which the  legislature is convened in  regular                                                             
   or special session for that session."                                                                                    
                                                                                                                                
   Page 5, following line 10:                                                                                                   
        Insert a new subsection to read:                                                                                        
        "(c)  A recommendation of the commission may not have                                                                   
   the  effect  of  allowing   a  legislator  whose  place   of                                                                 
   permanent residence  is within  50 miles  of a  location  in                                                                 
   which the  legislature is  convened  in regular  or  special                                                                 
   session to receive compensation  in the form  of a per  diem                                                                 
   allowance or  reimbursement  for moving  expenses  for  that                                                                 
   session."                                                                                                                    
                                                                                                                                
CHAIR MCGUIRE objected for discussion purposes.                                                                                 
                                                                                                                                
SENATOR  BUNDE   said  he  believes  in   truth-in-labeling,  and                                                               
compensation  that  is  taxed  should not  be  called  per  diem.                                                               
Amendment 1  asks the commission  to look  at that. The  staff at                                                               
Legislative Legal Services  told him that "we  actually cannot do                                                               
that, even though  leg council is a creature  of the legislature,                                                               
we  can't tell  them, apparently,  what to  do when  it comes  to                                                               
deciding  what is  salary  and  what is  per  diem."  He said  he                                                               
narrowed the amendment to focus on  the intent of per diem, which                                                               
is when  someone must move  to a temporary  residence. Currently,                                                               
people who  live in  Juneau are  paid per diem.  It is  likely an                                                               
attempt  to   equalize  salaries,   but  it  is   not  accurately                                                               
described. The  amendment is an  attempt to "suggest that  if you                                                               
live within  50 miles of  where the legislature is  convened, and                                                               
I'm will to discuss the distance  … [you] ought not to be subject                                                               
to a per diem allowance." A 50-mile commute can be done daily.                                                                  
                                                                                                                                
CHAIR MCGUIRE said the amendment  is before the committee and the                                                               
letter [of intent] will be discussed separately.                                                                                
                                                                                                                                
9:29:18 AM                                                                                                                    
SENATOR  FRENCH said  this battle  has  come up  before, and  the                                                               
topic  is exactly  what the  commission should  do. There  may be                                                               
some  places  near  Juneau  cut  off from  the  road  system.  He                                                               
appreciates treating  everyone fairly,  but this  is a  topic for                                                               
the commission, "not us here on the fly."                                                                                       
                                                                                                                                
SENATOR GREEN said she agrees.                                                                                                  
                                                                                                                                
SENATOR  BUNDE said  he appreciates  that view,  and "I  think it                                                               
makes my point: we ought to  be telling the commission they ought                                                               
to study this and that amendment would do that."                                                                                
                                                                                                                                
A roll call  vote was taken. Senators McGuire and  Bunde voted in                                                               
favor of  Amendment 1,  and Senators  Green, French,  and Stevens                                                               
voted against it. Amendment 1 failed on a vote of 2 to 3.                                                                       
                                                                                                                                
9:31:13 AM                                                                                                                    
CHAIR MCGUIRE said  the letter of intent is  before the committee                                                               
and she asked Senator Bunde if he wants to offer it.                                                                            
                                                                                                                                
SENATOR  BUNDE offered  Conceptual  Amendment  2. The  commission                                                               
should have  a broad  scope, but  because of  the problem  of the                                                               
legislative council  not being,  apparently, under  the direction                                                               
of the legislature,  he wants the commission  to review long-term                                                               
per diem to see if it is more accurately defined as salary.                                                                     
                                                                                                                                
CHAIR  MCGUIRE  asked why  Senator  Bunde  thinks the  commission                                                               
won't have that authority.                                                                                                      
                                                                                                                                
9:32:05 AM                                                                                                                    
SENATOR BUNDE said without this  letter the commission may choose                                                               
to ignore the issue.                                                                                                            
                                                                                                                                
SENATOR GREEN asked if Senator  Bunde said legislative legal told                                                               
him that long-term per diem is salary.                                                                                          
                                                                                                                                
SENATOR  BUNDE  said no.  They  said  long-term per  diem  versus                                                               
salary is  a creature of  the legislative council, "and  we can't                                                               
tell them to  change that." The council has chosen  the term, and                                                               
he thinks it  is a subterfuge to say that  legislators don't have                                                               
a big  salary, but  he was told  that IRS sees  it as  salary. He                                                               
said he is just suggesting  the commission review the accuracy of                                                               
those terms.                                                                                                                    
                                                                                                                                
CHAIR MCGUIRE  said it  is a  directive, and  she feels  that the                                                               
committee has  made it  clear on the  record that  the commission                                                               
will look at  all compensation. There may be  legitimate per diem                                                               
expenses like  gas or  other things to  do legislative  work. Her                                                               
concern is telling the commission it must redefine it.                                                                          
                                                                                                                                
9:34:30 AM                                                                                                                    
SENATOR BUNDE said the word "encourage" can replace "shall".                                                                    
                                                                                                                                
CHAIR  MCGUIRE asked  why  this would  be  highlighted above  any                                                               
other subject.                                                                                                                  
                                                                                                                                
SENATOR BUNDE  noted that  any accountant will  say what  we call                                                               
long-term per  diem is salary.  It is accuracy in  labeling. When                                                               
the term was put in, it was a subterfuge to hide salaries.                                                                      
                                                                                                                                
The committee took an at-ease from 9:35:59 AM to 9:37:46 AM.                                                                
                                                                                                                                
SENATOR  BUNDE said  he  can count,  and  he withdrew  Conceptual                                                               
Amendment 2.                                                                                                                    
                                                                                                                                
SENATOR MCGUIRE asked the record  to reflect that good statements                                                               
have been made.                                                                                                                 
                                                                                                                                
SENATOR  FRENCH  moved  to  report HB  260  from  committee  with                                                               
individual  recommendations and  attached  fiscal note(s).  There                                                               
being no objection, CSHB 260(STA) passed out of committee.                                                                      
                                                                                                                                

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