SB 1566 Boost to Legislator's Basic Pay by 85%-99% Requires No New Transparency/Disclosures.

The Senate Rules committee held a recent hearing on SB 1566, which would significantly increase legislative base salaries and also add a child care allowance of $1,000 for members with children under age 13. 

A 1 PM Senate Rules Committee work session for that bill is now scheduled for Tuesday February 22nd. It includes a -6 amendment that shortens the period of child care allowance eligibility to 6 months and 3 months during the regular and interim sessions. 

As a general proposition I am in favor of reasonable compensation for legislators. 

However this bill would significantly increases salaries without any requiring any additional disclosures or obligations for the legislators. 

At a minimum the bill should be amended to 

• Require the annual disclosure of the actual income received from outside employment for each legislator.
• Require the annual disclosure of the actual amounts received for per diem, authorized expenses, and office allowance for each member.
• Require the annual disclosure of salaries and expenditures to family members. 

Here are some of the other problems I see with the current bill: 

1. From 2015-2021 the base salary of legislators already increased by 42%, triple the rate of inflation. The table pasted below shows the salaries and 2015 and 2021 and the inflation adjusted salaries for the same year.  The QualifyInfo calculator shows that inflation during the period was 14.3 %, while legislative base salaries increased by 42.4%, three times the rate of inflation. So, during the 2015-2021 period, the actual legislator base salary increased by $6,485 more than inflation. 
   
   
   
2. The legislators will Receive two pay increases from now until July 2023, and the July 2023 salary will exceed $60,000. The recent discussion referenced a current "around $57,000" annual wage with the new legislation. While the published Oregon current OEWS average wage for 2020 is $56,880, the wage data for 2021 [published in late March 2022] will be used to increase pay in January of 2023, and there will be another increase in July of 2023 after the 2022 data is released in late March of 2023. Using the average annual increase in Oregon average pay of 3.3% over the 2014-2020 period the 2022 average wage (used to determine the salary in July of 2023) will be in excess of $60,000. The table below shows the math:
   
   
   
3. A $60,687 July 2023 base salary would be an increase of 85% from the CURRENT $32,289 salary and, over 5 years, an 148% increase from the 2018 base salary of $24,456. 
4. The use of the average wage instead of the median wage places legislators salaries in the top 40% of wages in the state, since higher wage jobs skew the average wage higher than the median. . The current 2020 average wage of $56,880 is 30% higher than the median wage of $43,760. 
5. The base salary is for less than a full time year.  Legislators are not required to be available for official business except during periods that the legislator is in session or during legislative days. During even years legislators are in session for six months, and in odd years the legislature is in session for only one month. Legislators can and do work second jobs and spend significant time fund campaigning and fund raising. 
6. The base salary is only PART of the compensation received by legislators with other key sources of compensation free from Oregon income tax. There is no source that I can find that shows TOTAL compensation paid to individual legislators, including per diem and $400 monthly allowances while the legislature is not in session. The latest Oregon Tax Expenditure report indicates that not all members claimed these deduction in 2018 but for the 50 that did the average amount of per diem and expense money was $12,300 and state tax savings were $1,050 for a combined taxable equivalent amount of $13,350. At the current rate of $155 per day legislators could receive $4,650 per month in per diem while the legislature is in session. This income is exempt from state income tax and if the member lives more than 50 miles from the state capital it is also exempt from federal income tax. 
7. Legislators also receive funding for office and staffing and that funding has also significantly increased. The Rules for the Oregon Senate show allowable office expenses/salaries that total $220,122 for this biennium. That is a 36%/$58,144 increase from the $161,978 allowed in the prior biennium.
   
8. Members may use these allocated office expenses to employ members of their families and may also use campaign funds to pay staff and expenses. A 2017 Oregonian story reported that 1/4 of members had paid staff that were relatives. I know of no current source for that data, or for the use of campaign funds to pay family members.  
9. The provision of a $1,000 allowance per member with children under 13 is not available to any other Oregon family. While the -6 amendment establishes a 6-month period and a 3-month period for childcare during the regular and interim sessions there remains no reason why legislators should have a special allowance for childcare unavailable to the public. Boosting pay by $4,500 annually for eligible members would boost estimated July 2023 pay to $65,187, a 99%/$32,348 increase from the current pay level.  

Originally created and posted on the Oregon Housing Blog.