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Sunday, April 29, 2007

Ind. Law - "Budget threatened by new legislative pay provision" [Updated]

Apparently not satisfied with their new pay raise, legislators are adding pay "bonuses" for themselves in the budget bill, according to a story just posted a few minutes ago by Mary Beth Schneider and Karen Eschbacher of the Indianapolis Star. Here are some quotes in what may be a fast-changing story:

Contentious provisions — including bonuses for key lawmakers — threatened to derail passage of the state budget today, with lawmakers facing a midnight deadline to complete work.

Failure would force a special session.

A draft copy of the budget — House Bill 1001 — which was released this morning, shows it still contains a stipulation that would force Gov. Mitch Daniels to appoint Democrats to the Ivy Tech Community College board of trustees. House Ways and Means Chairman Bill Crawford, D-Indianapolis, who is on the Ivy Tech payroll, had said Saturday that that provision was removed. [See yesterday's Star story on this here.]

Today, Crawford said he was shocked to discover this morning that it still is in the budget, buried deep in the 225-page draft. Asked whether it will be removed, he said: “Possibly.”

In addition, the budget contains a provision giving additional raises to Senate leaders, including $500 for Senate President Pro Tempore David Long, R-Fort Wayne.

Those bonuses are on top of the pay raise legislators are already getting under a bill signed into law by Daniels last week, which takes their base pay from $11,600 to more than $20,700 and also guarantees annual raises whenever state employees get one.

With the additional leadership pay, Long, for instance, would get an extra $7,000 a year, up from $6,500. The speaker of the House, B. Patrick Bauer, D-South Bend, would still receive $6,500.

Long said the increases were “primarily” for committee chairmen. Currently, most committee chairmen do not receive additional pay. Under the provision, most would receive a $1,000 bonus.

“It’s a small thank-you for what they do,” he said. “It’s a phenomenal amount of work to do it right. They deserve to be compensated for it.”

But the Ivy Tech and extra-pay provisions threatened to implode budget negotiations, which must conclude today, the final day of the 2007 legislative session.

Those of you who have been following the pay bill in the ILB may not be surprised at this story. For background on the non-transparent legislative pay provisions incorporated in the budget bill, see this ILB entry from April 10th and its links, as well as this entry from April 15th and this one from April 24th.

And there is more. A "companion bill" was passed, along with the legislative pay bill, last week. The ILB admits that it knew nothing about this bill, and read nothing about it in the press until after it had passed.

The bill is SB 501. Part of it makes some sense. State employees who are eligible for state retirement but not yet eligible for Medicare (i.e. not yet 65) are often hesitant to take early retirement because it means they lose their access to affordable group insurance coverage (after the 18-months of Cobra access has terminated).

SB 501 is apparently designed to address that problem. I had not written about it yet because I have not had a chance the review it. My immediate question is, how does providing some extra money to early retirees resolve the access to affordable insurance problem? A related question is - why exactly should legislators who are leavng the General Assembly before they turn 65 be included in this "bonus"?

Here is how Niki Kelly of the Fort Wayne Journal Gazette described the new health care benefit in an April 25th story:

The governor also signed Senate Bill 501, a companion bill that establishes a retirement medical benefits account for state employees of all three branches of government as well as elected and appointed officers.

Legislators previously had authorized a special state-supported retirement health plan for only themselves. But it became a sensitive political issue, and they officially repealed it in the pay raise bill.

As a result, though, the General Assembly decided to set up a similar plan for all retiring state employees or elected officials who have served at least 10 years.

It requires the state to make annual contributions to the account based on the age of the employee, from $500 for employees younger than 30 to $1,400 for employees 50 or older.

In addition, there is a “catch-up” provision for any state employee retiring with at least 15 years of service or elected officer with at least 10 years of service. This supplemental contribution – meant to beef up the account in the first 10 years of existence – would be $1,000 for every year of service.

The catch-up would expire in 2018.

Money in the account can be used for health care costs of all kinds after retirement, including insurance premiums. If there is a balance in the account when the employee reaches 65, the money can be used to supplement Medicare coverage.

Senate President Pro Tem David Long, R-Fort Wayne, said although legislators would be eligible “this is really more for state employees” to bridge the gap between retirement and Medicare coverage.

Rep. Mike Ripley, R-Monroe, voted against the bill in the House, noting he couldn’t vote for a cash benefit for himself. He is serving his 11th year in the legislature.

Ripley said the plan is a great perk for state employees but that he doesn’t “know of any private corporation with a program like this.”

Several Democrats who voted against it said the plan didn’t go far enough.

“You can put money in for 20 years and still not have enough money to buy insurance for two years,” said Rep. Craig Fry, D-Mishawaka.

The new program will cost the state $55.7 million in the first year, with that number staying in that range before dropping substantially in 2018 after the 10-year catch-up provision expires.

So add another piece to the so-called "transparent" legislative benefits package. The ILB hopes at some point to put together a spread-sheet on legislative compensation, that would be able to produce the real amount any specific legislator is receving for his or her legislative service in any year. I don't expect it to be any easy task.

Finally, the Indianapolis Star had an editorial today on legislative ethics rules. A little late. Where were they (and other state papers) on this issue during the session, and why are they still not talking about the real issues of "part-time" legislators heading committees that reflect their real life employment, and "part-time" legislators holding important, highly-paid policy positions at Ivy Tech?

Recall this ILB entry from April 17th, about an Alabama paper winning a Pulitzer Prize this month for its series of stories about a number of their state legislators who worked for Alabama's community college system. In Alabama, according to the story:

Legislators defended the payments they received from the two-year college system, noting they need to earn a living. The lawmakers said they receive just over $30,000 a year in part-time salary and expenses from the Legislature.
From The Birmingham News' announcement of the Pulitzer:
Mr. Blackledge, 43, won for his work exposing extensive corruption and cronyism in Alabama’s network of 26 two-year colleges and training schools.

Mr. Blackledge’s reporting has led to the chancellor’s dismissal and to a move by the governor to ban the hiring of any state legislator by any of the colleges.

[Updated at 6:15 pm] More information on Ivy Tech, Indiana's community college system, has been added to the end of the online Star story this afternoon:
The outgoing Ivy Tech president, Gerald Lamkin, has been at Speaker of the House] Bauer’s office throughout much of the final hours of the session.

Bauer and [House Ways and Means Chairman Bill] Crawford are both employed by Ivy Tech. Bauer is vice president of external partnerships and Crawford is manager of community relations and outreach programs

For more, see this Oct. 8, 2006 ILB entry, headed "Should legislators should be allowed to serve as officers or directors of state universities and schools?"

The newly updated Star report states that:

One of two contentious issues that carried the potential to derail a new state budget was defused this afternoon, just hours before the General Assembly’s midnight adjournment deadline. The other, involving bonuses for key Senate lawmakers — remained unresolved.

The first of the two problem provisions, which would have required Gov. Mitch Daniels to appoint Democrats to the Ivy Tech Community College board of trustees, was removed from the budget.

Here is the revised CCR for HB 1001 (i.e. v.2).

Posted by Marcia Oddi on April 29, 2007 01:59 PM
Posted to Indiana Government | Indiana Law