By Bob Katzen
STATE HOUSE, BOSTON, JAN. 25, 2017. The House approved 116-44 and sent to the Senate a pay raise package including hiking the salaries of the two leaders who filed the bill, House Speaker Robert DeLeo (D-Winthrop) and Senate President Stan Rosenberg (D-Amherst), by $45,000 from $97,547 to $142,547. The measure also hikes the pay of the Legislature’s two Republican leaders, Sen. Bruce Tarr (R-Gloucester) and Rep. Bradley Jones (R-North Reading) by $37,500 from $85,047 to $122,547.
The measure also hikes the pay of the Legislature’s two Republican leaders, Sen. Bruce Tarr (R-Gloucester) and Rep. Bradley Jones (R-North Reading) by $60,000 from $95,033 to $155,033.
The pay raise package, estimated to cost $18 million in its first year is making its way through the Legislature at lightning speed. It was only Thursday January 18, when the temporary Joint Committee on Ways and Means held a brief one-hour hearing on a two-year-old report of the Special Advisory Commission on the Compensation of Public Officials, created by the Legislature in June 2014. Speaker DeLeo and Senate President Rosenberg have not yet appointed members of any committees. A temporary Ways and Means Committee was hastily appointed and assembled for the hearing and then to draft the pay raise package. The hearing was convened with less than 72-hours-notice to the public. Now just a week later, a pay raise package is poised to be given final approval by the House and Senate and sent to Gov. Charlie Baker. The governor has not indicated if he will sign the package. “We said in 2014 we didn’t think the pay raise made sense at that point in time and I don’t see a lot that’s changed with respect to that,” Baker said. If he vetoes it, the Legislature would need a two-thirds vote of each branch to override the veto. Legislative leaders are confident they have the votes to override a veto as evidenced by the 116-44 vote which is more than two-thirds needed.
Currently, 101 or more than half of the state’s 200 legislators receive a stipend. Thirty-eight of the 40 senators and 63 of the 160 representatives receive bonus pay for their service in Democratic or Republican leadership positions, as committee chairs or vice chairs and as the ranking Republican on some committees. Currently, annual stipends for these positions range from $7,500 to $35,000 above their annual base salary. The bill would increase many of those stipends and the new range would be from $15,000 to $65,000.
The measure also raises the governor’s salary by $33,200, from $151,800 to $185,000; the lieutenant governor by $30,068, from $134,932 to $165,000; secretary of state by $34,738 from $130,262 to $165,000; treasurer by $47,083 from $127,917 to $175,000; auditor by $30,048 from $134,952 to $165,000; and the attorney general by $44,418 from $130,582 to $175,000. It also bans these six constitutional officers and the House speaker and Senate president from earning outside income, other than passive income from investments. It also hikes the salaries of the state’s judges by $25,000 over an 18-month period.
The measure puts an end to legislative per diems which are travel, meals and lodging reimbursements collected by the legislators. These reimbursements are given to legislators above and beyond their regular salaries.
The amount of the per diem varies and is based on the city or town in which a legislator resides and its distance from the Statehouse. In 2016, 103 or more than one-half of the state’s 200 legislators were paid per diems totaling $278,601.
Another provision increases the annual general expense allowance for each legislator from $7,200 to $15,000 for members whose districts are within a 50-mile radius of the Statehouse and to $20,000 for districts located outside of that radius. The most recent increase in the general expense allowance was a hike from $3,600 to $7,200 in 2000. This allowance is used at the discretion of individual legislators to support a variety of costs including rent of a district office, contributions to local civic groups and the printing and mailing of newsletters. Legislators are issued a 1099 from the state and are required to report the allowance as income but are not required to submit an accounting of how they spend it.
Under current federal law, which the bill does not affect, these same legislators who live more than 50 miles from the Statehouse are eligible for a special federal tax break. A 1981 federal law allows them to write off a daily expense allowance when filing their federal income tax return. The complicated system determines a daily amount, ostensibly for meals, lodging and other expenses incurred in the course of their jobs, which can be deducted for every “legislative day.”
Under the Massachusetts Legislature’s system and schedule, every day of the year qualifies as a legislative day. The Legislature does not formally “prorogue” (end an annual session) until the next annual session begins. This allows legislators to take the deduction for all 365 days regardless of whether the Legislature is meeting or not. Legislators do not even have to travel to the Statehouse to qualify for the daily deduction.
The amount of the deduction is based on the federal per diem for Massachusetts. It varies from year to year. The daily per diem for legislators for 2016 varies in different parts of the state and is seasonal. It ranges from $162 per day to $366 per day or between $59,130 and $133,590 annually. It is estimated that more than one-third of the state’s 200 legislators qualify for this deduction and are eligible to pay little or no federal income tax on their legislative salaries.
Other provisions of the pay hike package give a $65,000 housing allowance for the governor. Massachusetts is one of only six states that supplies neither a governor’s residence nor a housing allowance, even as Boston has the among the most expensive housing market of any of the state capitals.
The bill changes the source and data on which current biennial legislative salary increases and decreases are based. In 1998, voters approved by a two-to-one margin a constitutional amendment requiring governors to calculate and announce an increase or decrease in legislative salaries every two years. The specific language requires legislative salaries to be “increased or decreased at the same rate as increases or decreases in the median household income for the commonwealth for the preceding two-year period, as ascertained by the governor.”
Supporters of changing the formula said that that the current method used to make that adjustment varies from governor to governor because each one can decide what formula to use to calculate the median household income. The House changed the formula so that the governor is required to use data from the Bureau of Economic Analysis (BEA) that measures the quarterly change in salaries and wages.
Under the current formula, legislators’ salaries were increased by $2,515 for the 2017-2018 legislative session. The current base pay for legislators is now $62,547. That hike came on the heels of a salary freeze for the 2015-2016 legislative session, a $1,100 pay cut for the 2013-2014 session and a $306 pay cut for the 2011-2012 session. Prior to 2011, legislators’ salaries had been raised every two years since the $46,410 base pay was first raised under the constitutional amendment in 2001.
The new $62,547 salary means legislative salaries have been raised $16,137, or 34.8 percent, since the mandated salary adjustment became part of the state constitution.
How does the new BEA formula compare with the current one? Under the current formula, legislators’ salaries were cut by 1.8 percent for the 2013-2014 session reducing the base salary of each senator and representative by $1,100 – from $61,132 to $60,032. If the BEA system was in effect in for the 2013-2014 legislative session, legislative salaries would have increased by 6.1 percent and raised salaries $5,278 – from $61,132 to $66,410.
The bill also has an emergency preamble attached to it. That means it goes into effect immediately instead of in the usual 90 days. The preamble says, “Whereas, the deferred operation of this act would tend to defeat its purpose, which is to make certain changes in law for compensation of public officials, therefore, it is hereby declared to be an emergency law, necessary for the immediate preservation of the public convenience.” The attachment of the preamble also means that if any group collects signatures to put a pay raise repeal question on November ballot, the raises would stay in effect until the election regardless of whether it is ultimately repealed or not. If there was not an emergency preamble, the raises would be suspended until voters have a chance to vote on it.
HOW THEY VOTED ON THE PAY RAISE (H 54)
Here is how local representatives voted on the pay raise package.
(A Yes” vote is for the pay raise. A “No” vote is against it.)
Rep. Christine Barber Yes Rep. Denise Provost No