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Little tweaks have boosted pay for some Alaska lawmakers to $90,000 per year

Pat Forgey
Alaska lawmakers's magic pay raise. Aaron Jansen illustration

For years, Alaska lawmakers thought that they were paid too little, given the weighty issues they considered and the long hours many put in.

Now, however, they're making an average of $80,000 a year, with some taking home more than $90,000. Talk about low pay has died down.

A couple of raises that boosted lawmaker pay came quietly, but now, thanks to an obscure Internal Revenue Service rule, legislators may not be able to avoid talking about them.

Remember 1986

Pay for Alaska lawmakers has been essentially stagnant since 1991, with complaints about it bubbling up from time to time among politicians. Whenever legislators took steps to increase their pay -- they’re the only ones who can do that -- somebody was sure to remind them of 1986. That was the year in which legislators were forced by the looming threat of a citizen's initiative to repeal raises they'd given themselves the previous year.

Finally, in 2008, some savvy legislators, such as Rep. Mike Doogan, D-Anchorage, found a way.

At the time, legislative salaries were officially about $24,000, even though some controversial salary supplements brought the actual amount to well above that.

A sticky issue

Instead of voting to enact pay raises, Alaska lawmakers have found subtle ways to increase their salaries, in some cases substantially, over the last five years. The first step was to shift the salary decision away from themselves by creating an independent State Officers Compensation Commission.

The five-member commission, headed by retired legislator Rick Halford, would make salary recommendations that would take effect automatically unless the Legislature specifically rejected them. Rep. Bill Stoltze, R-Chugiak, for instance, said he didn't want to be “anywhere near that tar baby” when the pay-raise bill came up. 

Even with Doogan willing to take the heat as sponsor, legislators weren't willing to pass the legislator pay raise bill outright. Instead, at the last minute, they amended it into a bill providing already-negotiated pay raises for state managers that was considered a must-pass bill by legislators and the administration.

The new salary commission boosted lawmakers' official salary from about $24,000 to $50,400 a year -- but at the same time eliminated pay for working outside the session, which sometimes amounted to an extra $10,000 to $20,000 a year.

The commission said the public considered the system of extra pay “vaguely deceptive.” Plus, commissioners said it was inequitable because many lawmakers declined extra pay for work outside the session, fearing political liability might follow. In exchange for the raise to legislators' formal salary, the commission banned such extra pay.

“Legislators shall receive no additional compensation for legislative service,” the commission said. After making that flat statement, though, the commission then provides legislators a way to raise their pay by deciding that “office expense accounts shall not be considered compensation.”

Also not considered compensation: travel and "per diem" expenses.

Secret new pay raises

That gave legislators a loophole, because they set the amount of office expenses through the Legislative Council, the joint House-Senate committee that manages the business of the Legislature. At the time of the pay increase, representatives were receiving $8,000 a year for office expenses, senators $10,000.

Much of that was used for such expenses as district newsletters, but any money not spent could be taken as income. Income tax would be withheld, just as it is with salary.

After the first pay raise, the State Officers Compensation Commission in subsequent years declined to give legislators any further raises. Sometimes, it cited the poor economy or upcoming elections as reasons. Legislators were able to use the office expense accounts to give themselves another pay increase, however.

In early 2011, the Legislative Council voted to do that, with then-chair, Sen. Linda Menard, R-Wasilla, saying that three-quarters of legislators wanted the increase. Costs had gone up in the 10 years since the last increase, she maintained.

Rep. Alan Austerman, R-Kodiak, objected, calling the proposal “basically a raise to legislators.”

The council increased the office accounts anyway, doubling them to $16,000 for representatives and $20,000 for senators.

Per diem $200 a day

Another source of money for legislators during the Juneau sessions is per diem, the amount each legislator earns every day the Legislature is in session, which is intended to cover the cost of living when lawmakers are away from home.

The exact amount for legislators living outside of Juneau varies, but in recent years per diem has been more than $200 a day. Juneau's three legislators earn per diem 25 percent less than that of their colleagues.

Last year, lawmakers' per diem added up to about $24,000, and it has been higher during years that included lengthy special sessions.

A new problem

Much of the new income Alaska lawmakers have socked away has flown under the public's radar until a legislative accountant warned last year that the way the Legislature administered office expense accounts presented some sticky tax questions. Previously, legislators were able to take the money as income, or have the money go directly to allowable office costs, present receipts and not have any taxes taken out -- or some combination of those methods.

To simplify things, the Legislative Council last December voted to treat all office expense money as income. More than half the office-expense money was already taken as income, but the change gave other legislators raises that they hadn't even sought.

Sen. Berta Gardner, D-Anchorage, has proposed legislation requiring an “accountable” office expense plan for everyone. If that passes, it would require receipts to be submitted for all expenses, and any unspent money would revert to the state.

Contact Pat Forgey at pat(at)alaskadispatch.com