A brewing battle is taking shape in the Legislature, as lawmakers prepare for the upcoming legislative session in Juneau: How much money do they get for their job as representatives and senators.
Legislators get paid by the State of Alaska treasury in a handful of ways. Their annual salary is set in law at $50,400 a year (the Senate President and House Speaker get an additional $500 a year). In addition to salary, lawmakers are also reimbursed for their moving costs to and from session. Finally, lawmakers not from Juneau are entitled to take per diem every day the Legislature is in session.
Per diem is not meant to be a form of compensation. Instead, it is meant to offset the costs that people incur for living temporarily in a town away from their home. Yet, the per diem issue has raised eyebrows with government watchdogs for several years. While most Alaskans do not object to the people representing them being reimbursed for the expense of working in the state’s capital, the per diem amount can be shocking: While state workers are reimbursed at a rate of $30 dollars a day if they are working more than 30 days in another location, legislators receive $293 a day, nearly 10 times the state worker rate.
Unlike a salary, per diem is not-taxable. This creates the opportunities for perverse incentives: The longer legislative sessions and special sessions go, the more tax-free money is issued to lawmakers.
Thus, legislators routinely earn up to $30,000 a year in per diem, bringing the total compensation closer to $80,000 a year, a little more than the average household income for an Alaskan family, which is $77,680.
Numerous attempts have been made to rein in per diem. Former Rep. Jason Grenn introduced a ballot initiative in 2017. Among other things, the initiative had a simple message to lawmakers: If a state operating budget doesn’t pass after 121 days (which is the constitutional limit for a regular session) legislators stop getting per diem. No budget, no per diem.
It was a simple idea, and popular. So popular in fact, that in the waning days of session, the Legislature passed a bill almost identical to the initiative, knocking it off the 2018 ballot.
The 2019 session was long, and the operating budget was not completed in the 121 day time limit. When the budget finally did pass in June, months behind schedule and shy of a government shutdown, the Legislature maneuvered. Using a loophole in its internal bylaws, the Legislative Council, which is the committee that oversees the Legislature’s business, voted to pay lawmakers their per diem retroactively for the period the budget was not enacted passed the 121 day limit. Proponents of the limit, like Grenn, were publicly furious, but hapless to do anything.
Per diem quieted down until this year. Once again, the budget process steamrolled over the constitutional deadline of 121 days. Yet again, the Legislature passed a last minute budget to keep the government doors open. And, in a repeat of 2019, the Legislative Council met within 24 hours of passing a get-out-of-town budget and paid lawmakers retroactively.
Gov. Mike Dunleavy, in reviewing the budget before him, saw that Alaskans were, for another year, having their annual Permanent Fund dividends set by political bargaining rather than by law. The governor also noted the Legislature moved with excessive speed to pay itself before they boarded their planes and boats to return to their home districts.
Dunleavy threw down the gauntlet with his vetoes. After vetoing the entire PFD to bring the Legislature back to work on an amount that could be set in law, Dunleavy also vetoed the Legislature’s allocation for per diem in the budget for the year. The governor’s message was: “No per diem without a fair PFD payment.
The reaction from many lawmakers was muted but furious. Only one, Sen. Bert Stedman of Sitka, made a public statement in opposition that foreshadows the fight to come, saying, “if there are going to be no rules (between branches of government) then there are no rules.”
Per diem is back in the forefront, thanks to the State Officers Compensation Commission. Created to answer the question of how much to pay public officials in a more independent manner, the commission reviews the pay and per diem for the governor, lieutenant governor, commissioners, and lawmakers.
The commission met this month and made several proposals on salary, including raising the pay for the governor, lieutenant governor, and commissioners. Dunleavy wrote the commission and declined the pay increase.
Turning to lawmakers, the commission wanted to take on the per diem issue a certain way: Increase lawmakers pay but limit per diem. By the time the commission met a second time, however, there was a clear disagreement on moving forward. The commission is now considering simply capping legislative per diem.
Like efforts before, the theory of capping per diem is simple: Get the work done in time, or there is a risk of incurring a cost.
Dunleavy seems to have reiterated that point. When his budget was released last week for the upcoming session, it included a “fast track” supplemental bill for urgent items. Among the urgent items was a supplemental Permanent Fund dividend payment, and the vetoed amount of per diem.
While Dunleavy’s budget was gathering the media attention, another meeting of the Legislative Council took place. One of the items to discuss was transferring money from elsewhere to pay lawmakers per diem retroactively for the fall special sessions since the funds were vetoed.
After debate, the motion to pay per diem failed by one vote: House Republican Leader Cathy Titlton’s no vote denied the Council the dight votes it needed.
The Legislative Council will meet again before session, likely to take up the issue of retroactive per diem.
In the meantime the State Officers Compensation Commission will finalize its pay recommendations, and submit those to the Legislature at the start of session. The recommendations cannot be amended: the Legislature will either accept what the commission proposes by not acting, or it will reject the entire recommendation in a vote from the House and Senate.
The legislative session is scheduled to begin on Tuesday, Jan. 18.
