December 11, 2018

The Update Desk: Meanwhile Back in Albany (v22)

The NY Legislative Pay Committee's report was issued yesterday, as expected, and it included changes to salaries, most stipends, and recommendations for limiting outside pay.

You'll recall in yesterday's post, one of the things we were wondering was whether the report would give the details we were looking for. The hope was  that it would
 ... provide more details on how this is all supposed to work, especially the limit on outside income. What counts in the limit, and how or if the legislators will be able to protect their outside income, such as transferring it to a spouse, are a couple of questions... The devil will be in the details, and that's the devil we're hoping to see...
Well, let's see if we can find that devil, shall we?  Here's what the report says.

Lulus. NY paid this extra money to 160 of 213 members of the Legislature. Going forward, only the top 15 majority and minority leaders and key committee people will receive the lulus, which will remain the same.

Legislative salaries. All members will receive increases in each of the next three years. On January 1, 2019 salaries go from $79,500 to $110,000. On January 1, 2020, it moves to $120,000 and on January 1, 2021, the last phase would bump it up to $130,000. 

Executive salaries. The governor's salary would go from $179,000 to $200,000 on January 1, 2019, to $225,000 on January 1, 2020, and to $250,000 on January 1, 2021. The Lieutenant Governor, Attorney General, and Comptroller will see increases to $190,000, $210,000 and $220,000 over the same period. 

Commissioner salaries. New York currently has six tiers for commissioner salaries; that would be reduced to four tiers, with raises for each tier each of the next three years.

Outside income. Beginning on January 1, 2020,  it is recommended that outside income be capped at $18,000; the cap would be increased to $19,500 on January 1, 2021. In both cases, the cap is set at 15% of base pay, which is comparable to how this is handled for Congress.

What went into the recommendations? Well, performance for one - the easiest and best method of measuring it is whether the budget passed on time. In 2018, it did. How salaries here compare to other states and the federal government, and the old being able to find good people thing were among the other considerations. I have to chuckle a bit, to think that the way to get 'good people' is to pay the current people more, but hey, who am I to ask such a question?

While the Legislature was in session for only 151 days (January 3rd to June 2nd) this year, members maintain they're really full time because they do so much constituent work for the 200+ days of the year they're not in Albany. So if we're going to pay them like they're full time, we want to ensure that they're always and only working for us, not for someone else. This means that compensation for the following types of outside employment would not be allowed:
  • affiliating with or being employed by any type of entity providing professional services involving a fiduciary relationship, except for the practice of medicine;
  • use of the legislator's name by any such entity;
  • practicing a profession involving a fiduciary relationship, except for the practice of medicine
  • holding an officer or board position for an association, corporation or other entity;
  • teaching, without prior approval from the legislative ethics commission; 
  • advances for copyright royalties, fees or equivalents

Allowable income under the 15% cap must derive from services actually rendered but there are exceptions: service in the Reserves or Guard; pensions from prior employment; investment income or income from a business where the member or their family holds a controlling interest, as long as the member is not a 'material factor' in generating the income; and royalties or similar payments generated by the use or sale of intellectual property. Income earned before the cap goes into effect, or before the member was elected, are also OK.

So it seems we got some of the devilish details -- a pretty detailed list of what's allowable as outside income, and what's not, which was important.

Personally, I would have preferred that they hold off on the raise until the end of the new term - all seats were just up for grabs last month - because some folks might decide they'd rather be who they were before November's election than who they'll become on January 1, 2020.

Not only that, but one of the major reasons for doing this is to ensure they're focused on us, not themselves - so giving them a year to cram in all of the outside income they can seems sort of antithetical to that goal.

Legislators can convene a special session to overturn the recommendations, but that seems unlikely.  What seems more likely is that there'll be court challenges to the plan, on the income cap almost certainly, and perhaps on the 'pay for performance' aspect of future raises.

We've not heard the last of this, for sure. 

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