Are Indiana Legislators Fairly Compensated?

There seems to be quite a bit of chatter among the mainstream media this past weekend that it may be time to consider a pay raise for Indiana's legislators. Marcia Oddi at the Indiana Law Blog wonders if this could be a coincidence. "So far I've read three stories today, from different parts of the state, all making a point that Indiana legislators are poorly paid," Oddi blogs today. At first blush, this seems like a no-brainer. Indiana lawmakers are paid only a base salary of $11,600, which has not been increased since 1985, more than 20 years ago. Of course it's time for a long-overdue pay raise you would think. But as Oddi points out, the situation is not exactly as it appears.

The $11,600, as it turns out, is just a small part of the compensation legislators are paid. They earn a per diem of $137, seven days a week during session. They also earn a per diem of $54.80, seven days a week during the rest of the year. While the base pay has not been adjusted since 1985, the per diem rate is periodically adjusted to take into account inflation. When you add the per diem pay to their base pay, the average legislator received $44,954 in compensation last year. The least amount anyone earned was $37,000. House Speaker Brian Bosma earned $50,964 with his extra pay as a legislative leader. In addition, legislators are reimbursed 44.5 cents per mile for travel expenses. They also receive a generous retirement benefit which provides a $4 match for every dollar a legislator contributes to his/her retirement account. Until recently, they also received very generous health insurance benefits for life. And let's not forget the most important point, Indiana legislators are considered part-time, citizen legislators.

It seems to me that Indiana's current compensation system is not at all transparent. Per diem pay is being systematically used and abused to boost legislative pay. Per diem pay should actually be paid only for those days when legislators are meeting in Indianapolis during session, and for other non-session days when legislators are required to attend an official legislative committee meeting. The purpose of per diem pay is to cover expenses for meals and lodging; however, even legislators from the Indianapolis area who return to their own homes every night are allowed to collect per diem pay, which seems to provide an unfair advantage for Indianapolis area legislators over those who must pay for their own lodging and meals (although the per diems are taxed at a higher rate for Indianapolis area legislators). Legislators often dine free while attending to legislative business at the expense of lobbyists, who are very generous in treating legislators to the best dining Indianapolis has to offer. Based upon the average compensation, it is clear that a per diem in one of the two forms is being collected by some legislators year-round.

As the system currently operates, it is very misleading to the public. Clearly, Indiana legislators are being compensated much better than the $11,600 base pay for what everyone claims is a part-time job. The current system is also quite generous to lawmakers who hold jobs where employers do not penalize them for time spent away tending to legislative business. Rep. Mike Murphy (R), who works for Anthem, and Rep. Bob Cherry (R), who works for Farm Bureau, are actually compensated to perform what sounds like government relations work for their respective employers. Several lawmakers, including House Speaker Pat Bauer (D), Rep. Craig Fry (D) and Rep. Bill Crawford (D) work in education and government-related jobs which pay quite well. Bauer, Fry and Crawford are all well-paid employees of Ivy Tech. They are what we commonly call "double-dippers."

When I first started getting involved in politics in Illinois in the late 1970s, state lawmakers there, who at the time were still viewed as part-time legislators, decided to boost their pay 40% during a lame-duck session following the 1978 election. The public uproar led to a citizen initiative to place a constitutional amendment on the ballot which cut the number of state representatives by one-third from 177 to 118. The ballot initiative was overwhelmingly approved by voters at the 1980 election. The so-called cutback amendment produced a full-time legislature. Legislators later sought to immunize themselves from voting on pay raises by creating a Compensation Review Board, which periodically set salaries for legislators and other state officials. The Board's recommendations became law unless both the House and Senate passed resolutions disapproving the raises. This produced a little dance routine where the House and Senate would trade off taking a bullet for not acting on the pay raise, thereby allowing it to become law. Even this system proved inadequate for Illinois' legislators. In the late 1980s, they added an additional stipend in the amount of $6,000 for any legislator who also served as a committee chairman or minority spokesman. After the stipend became law, legislative leaders created enough committees to ensure all lawmakers, except for those in the doghouse with leadership, earned a stipend.

Illinois just boosted its legislative pay again by 9%--in a lame-duck session. They now earn $63,143 in base pay. They also receive leadership stipends ranging from $9,612 to $25,576 in additional pay. They also receive a per diem of $125 for each day the legislature is in session, as well as mileage reimbursement. The average lawmaker is taking home at least $85,000 annually. Illinois legislators have a budget to finance district offices with full-time legislative staff. Illinois' legislative retirement benefits are also very generous.

It seems to me that, if Indiana legislators think they are undercompensated, they should begin by devising a more straight-forward system of pay than the current system, which by design makes their pay appear much less than what it actually is. Indiana should also consider whether it wants full-time or part-time legislators. The part-time legislators seem to be as susceptible to the influences of special interest groups as full-time legislators--perhaps even worse. In the end, pay doesn't seem to make a whole lot of difference. Members of Congress earn more than $160,000 a year, and that wasn't enough to stop former Rep. Randall Cunningham (R-CA) from accepting about $2.5 million in bribes or the numerous other recent cases of congressmen becoming entangled in unethical dealings with lobbyists.