By Bob Katzen
THE HOUSE AND SENATE. There were no roll call votes in the House or Senate last week.
PANEL ISSUES REPORT ON PAY RAISES — The Special Advisory Commission on the Compensation of Public Officials, created by the Legislature in June as part of the fiscal 2015 state budget, has issued its report and is recommending substantial pay raises for the governor and the state’s five other constitutional officers, the speaker of the House and the Senate president.
Other hikes suggested by the panel include increasing each legislator’s annual general expense allowance from $7,200 to $10,000 for members whose districts are within a 50-mile radius of the Statehouse and to $15,000 for districts located outside of that radius; eliminating legislative per diem payments for meals and lodging reimbursements; changing the source and data on which current biennial legislative salary increases and decreases are based; and providing a $75,000 annual housing allowance for the governor.
The panel recommends that the governor’s salary be increased by $33,200, from $151,800 to $185,000; the lieutenant governor by $30,068, from $134,932 to $165,000; the secretary of state by $34,738, from $130,262 to $165,000; the treasurer by $47,083, from $127,917 to $175,000; the auditor by $25,575 from $137,425 to $165,000; the attorney general by $44,418, from $130,582 to $175,000; and the speaker and senate president, by $79,967 from $95,033 to $175,000.
It also recommends that that the six constitutional officers and the House speaker and Senate president be prohibited from earning outside income other than passive income from investments, as well as an end to legislative per diems, which are travel, meals and lodging reimbursements collected by the legislators. In 2013, legislators collected a total of $291,216 in per diems and in 2014 have so far been paid $177,067.
Some supporters of the per diems say the system is fair and note the rising costs of travel, food and lodging. They argue many legislators spend a lot of money on travel to Boston and some spend the night there following late sessions. Others say that some legislators accept the per diem but use all of the revenue they receive to support local nonprofit causes. They say that not taking the per diem would leave that money in the state’s general fund to be spent on who knows what.
Opponents argue most private sector and state workers are not paid additional money for commuting. They say the very idea of paying any per diem is outrageous when thousands of workers have lost their jobs and homes and funding for important programs has been cut.
While the commission recommends that the per diem should be eliminated, it also suggests that the annual general expense allowance for each legislator should increase from $7,200 to $10,000 for members whose districts are within a 50-mile radius of the Statehouse and to $15,000 for districts located outside of that radius. The most recent increase in the office expense allowance was a hike from $3,600 to $7,200 in 2000. The allowance is used to support a variety of costs including rent of a district office, contributions to local civic groups and the printing and mailing of newsletters. Legislators are issued a 1099 from the state and are required to report the $7,200 as income but are not required to submit an accounting of how they spend it.
The commission also calls for an annual $65,000 housing allowance for the governor, noting that Massachusetts is one of only six states that supplies neither a governor’s residence nor a housing allowance, even as Boston has the most expensive housing market of any of the state capitals.
Finally, the panel recommends changing the source and data on which current biennial legislative salary increases and decreases are based. In 1998, voters approved by a two-to-one margin a constitutional amendment requiring governors to calculate and announce an increase or decrease in legislative salaries every two years. The specific language requires legislative salaries to be “increased or decreased at the same rate as increases or decreases in the median household income for the commonwealth for the preceding two-year period, as ascertained by the governor.”
The commission concluded that the methods used to make that adjustment vary from governor to governor because the decision by the governor has to made in January, and the median household income figures published by the Census Bureau from the prior year are not available at that time.
The panel said it has researched a number of options and data sources for calculating the change and recommends using data from the Bureau of Economic Analysis (BEA) that measures the quarterly change in salaries and wages. The panel argues that the BEA figures are more up-to-date compared to the census ones.
Barbara Anderson, president of Citizens for Limited Taxation, has a different opinion. She told Beacon Hill Roll Call, “The Massachusetts constitution allows rank-and-file legislators’ pay to increase with median household income. The commission’s report changes ‘median household income’ to another determinant, which would allow a higher increase for legislators; but the change would require a constitutional amendment, which couldn’t be approved by voters until 2018.”
Michael J. Widmer, president of the Massachusetts Taxpayers Foundation, told Beacon Hill Roll Call that each governor has had to improvise to estimate what the figures would be for that second year and have sometimes been way off. “Since there is at least a nine-month lag in the median household income data published by the Census Bureau, governors have found it impossible to meet the constitutional requirement,” Widmer said. “The BEA data provides a close approximation in a far more timely manner.”
Anderson responded, “This was all discussed at the time yet they put ‘median household income’ into the constitution. Everyone agreed the governor could estimate a full year, then adjust the amount of the pay when the final number became available. What are they saying now, that they should violate the constitution in order to produce a more accurate result?”
The complete report of the commission can be found on the commission’s website: MassPublicComp.umb.edu.
LEGISLATORS’ CURRENT SALARIES AND OTHER BENEFITS
In light of the commission’s report, this week Beacon Hill Roll Call examines the salaries and other benefits currently received by the commonwealth’s state senators and representatives in 2014.
BASE SALARY — The current base salary for legislators is $60,032. Legislators have had their pay cut by $1,406 since 2011. Until that time, their salaries had been raised every two years since 2001, an increase of $13,622, or 29 percent, since the mandated salary adjustment became part of the state constitution.
BONUS PAY FOR 102 LEGISLATORS — Over the past several years, the Legislature has increased the total number of legislators who receive annual bonus stipends of $7,500 to $35,000 beyond their annual base salary. The latest figures show that at least 102, or more than half, of the state’s 200 legislators receive a stipend. All 40 senators and 62, or more than 40 percent, of the representatives receive bonus pay for their service in Democratic or Republican leadership positions, as committee chairs or vice chairs and as the ranking Republican on some committees.
Supporters say legislators in these important positions should be appropriately compensated for their many added responsibilities and hard work.
Critics say the base salary is sufficient and is often automatically increased every two years.
PER DIEMS — Legislators are entitled to collect “per diems” to reimburse them for mileage, meals and lodging expenses for travel from their home to the Statehouse. These reimbursements are not taxable income and range from $10 per day for legislators who reside in the greater Boston area to $82 for Western Massachusetts lawmakers and $100 for those in Nantucket. The Legislature in 2000 doubled these per diems to the current levels.
$7,200 FOR GENERAL EXPENSES — Each legislator receives a $7,200 annual general expense allowance. The Legislature in 2000 doubled this allowance from $3,600 to $7,200. This separate, flat-rate expense allowance is not based on a lawmaker’s geographic distance from the Statehouse. It is designed to pay for some of the costs of legislators’ district offices and other expenses including contributions to local civic groups and the printing and mailing of newsletters. Legislators are issued a 1099 from the state and are required to report the $7,200 as income but are not required to submit an accounting of how they spend it.
PARKING SPACE — Lawmakers are entitled to a parking space inside the Statehouse garage or at the nearby McCormack State Office Building. The first $230 in monthly value of the space is a tax-free benefit under federal and state guidelines that apply to all public and private employees, not just state legislators. Any value of the space above this amount is treated as taxable income. The value of the parking spaces in 2014 was determined by the Bureau of State Buildings to be $413 per month. Based on that figure, legislators would be taxed only on the excess $183 monthly by the Internal Revenue Service and the state.
HEALTH INSURANCE — Legislators are eligible to choose from 11 health insurance plans offered by the state’s Group Insurance Commission, which manages the plans for over 420,000 individuals — current and retired state and certain municipal workers and their dependents.
Total monthly full-cost premiums for family plans range from $1,098 to $2,183 with the employee share of the premium ranging from $220 to $619 effective July 1, 2014. Individual plans are available from $461 to $939 with the employee share of the premium ranging from $92 to $266. Lawmakers elected on or before July 1, 2003, pay 20 percent of the premium and the state pays 80 percent. Those elected to their first term on or after July 1, 2003, pay 25 percent while the state picks up only 75 percent. State and federal privacy regulations protect this information; it is not possible to obtain records about which plans individual legislators have purchased.
LIFE INSURANCE — Legislators who purchase a health insurance policy from the state are also required to buy the state’s basic $5,000 life insurance policy. This costs employees $1.28 to $1.56 per month, depending on the date of hire. The same 20/80 25/75 formula used for health insurance also applies to this life insurance. Legislators also have the option to buy additional life insurance with a value of up to eight times their salary. The entire premium for the optional insurance is paid by legislators.
LONG-TERM DISABILITY AND HEALTH CARE SPENDING ACCOUNT — Legislators also have the option to open a Health Care Spending Account (HCSA) and Dependent Care Assistance Program (DCAP), and to buy long-term disability insurance. The HCSA allows legislators to set aside funds to pay for out-of-pocket health care expenses with before-tax dollars while the DCAP allows them to set aside funds to pay for certain dependent care expenses with before-tax dollars. This participation reduces their federal and state income taxes. The entire premium for long-term disability is paid by legislators.
DENTAL AND VISION INSURANCE — Legislators are eligible to choose one of two dental/vision insurance plans. Current monthly employee premium costs for family plans range from $14 to $19, while individual plans range from $5 to $6. All lawmakers pay 15 percent of the premium and the state pays 85 percent.
SOME LEGISLATORS DO NOT PAY FEDERAL TAX ON THEIR LEGISLATIVE SALARY — Legislators who live more than 50 miles from the Statehouse are eligible for a special federal tax break. A 1981 federal law allows them to write off a daily expense allowance when filing their federal income tax return. The complicated system determines a daily amount, ostensibly for meals, lodging and other expenses incurred in the course of their jobs, which can be deducted for every “legislative day.”
Under the Massachusetts Legislature’s system and schedule, every day of the year qualifies as a legislative day. The Legislature does not formally “prorogue” (end an annual session) until the next annual session begins. This allows legislators to take the deduction for all 365 days regardless of whether the Legislature is actually meeting or not. Legislators do not even have to travel to the Statehouse to qualify for the daily deduction.
The amount of the deduction is based on the federal per diem for Massachusetts. It varies from year to year and changes annually on Oct. 1. The daily per diem for legislators from October 2013 through September 2014 varies in different parts of the state and is seasonal. It ranges from $153 per day to $350 per day or between $55,845 and $127,750 annually. It is estimated that more than one-third of the state’s 200 legislators qualify for this deduction and are eligible to pay little or no federal income tax on their legislative salaries.
ALSO ON BEACON HILL
CUT IN THE INCOME TAX AND LONG-TERM CAPITAL GAINS TAX RATES — The State Department of Revenue announced a reduction in the income tax rate and long-term capital gains tax from 5.2 percent to 5.15 percent for Bay State taxpayers effective Jan. 1, 2015. Sufficient economic growth under the terms of a 2002 law triggered the reduction.
These tax cuts do not need the approval of the Legislature. They are part of a system devised by the Legislature when it approved a $1 billion-plus tax hike package in 2002. The package set the long- term capital gains tax at 5.3 percent and froze the income tax rate at 5.3 percent instead of allowing it to drop to 5 percent in January 2003 — a reduction that was approved by voters in 2000. The 2002 package also includes an automatic trigger that reduces both taxes by 0.05 each year that the state’s economic growth is at least 2.5 percent until each tax is reduced to 5 percent. The 2014 growth is 2.7 percent. The tax cuts are estimated to reduce state revenue by $70 million between Jan. 1, 2015, and the end of fiscal year 2015 on June 30, 2015, and then $140 million for the next full fiscal year.
Senate GOP Minority Leader Bruce Tarr, R-Gloucester, hailed the cuts. He said, “With state spending reaching historic levels, it’s important that we also consider the people that are paying the bills. That’s why this modest tax relief is an important part of the state budget equation. It also moves us closer to the income tax rate that people approved at the ballot box several years ago and offers a chance for the reinvestment our economy needs to produce a robust recovery.”
Noah Berger, President of MassBudget, criticized the cuts. He said, “While our Commonwealth could be making investments to expand opportunity for all of our children and improve lives in our communities, this automatic tax cut will primarily benefit the wealthy and it will likely force cuts in education, transportation and other investments in our people and our economy.” He also blamed Gov. Deval Patrick’s recent cutting of funding for school transportation, job training, health care and other areas on these tax cuts.
This is the third year that an automatic tax cut was triggered. The income tax rate and long-term capital gains tax rate were reduced from 5.3 to 5.25 in 2012 and then from 5.25 to the current 5.2 in 2014.
ALLOW INTERNS TO GIVE SHOTS (S 2127) — The Senate approved and sent to the House a bill allowing pharmacy interns to give immunization shots to consumers. Pharmacy interns are students who have completed at least two years at an accredited school of pharmacy registered by the state. The intern would only be allowed to give the shots under the direct supervision of a registered pharmacist.
Supporters said getting shots at pharmacies is easier, faster and less expensive than at doctors’ offices. They said allowing interns to give the shots will increase the number of customers the pharmacy can handle and free up the time of the pharmacist to focus on filling prescriptions.
LIMIT ON HOW MUCH GAMBLERS SPEND ON SLOT MACHINES — The Massachusetts Gaming Commission unanimously approved a pilot program allowing gamblers to voluntarily set a limit on how much they spend on the slot machines at the slots parlor scheduled to open in Plainville in 2015.
Mark Vander Linden, the commission’s director of research and problem gambling, has been pushing the proposal, which is the first of its kind in the nation. The commission rejected another Linden proposal that would require gamblers who want to raise their spending limit to be subject to a 24-hour “cooling off” period.
Gaming Commission Chairman Stephen Crosby said, “The law makes this a high priority (to) keep problem gambling to the barest possible minimum, and we’re following the law and trying to do that.”
ROSENBERG SENDS MEMO FOLLOWING BOSTON GLOBE STORY — Senate Majority Leader Stanley Rosenberg, D-Amherst, 65, who several months ago locked up the votes to be elected Senate president, wrote a memo to the chamber’s 33 Democrats assuring them there is a firewall between his personal and work life. He sent the memo following a Boston Globe report that 27-year-old his partner Bryon Hefner “boasted to senators about his influence on key decisions on Beacon Hill.”
In the memo, Rosenberg said, “As you saw from my response, I was open and transparent as I have been in the past. I intend to lead the Senate in the same way … I have enforced a firewall between my private life and the business of the Senate, and will continue to do so.”
Rosenberg said he has made it clear to his partner that he is not going to be involved in the business of the Massachusetts Senate. Hefner has worked since May at Regan Communications Group, a public relations firm. He had also interned in Rosenberg’s office before they began dating and later ran Rosenberg’s political committee.
“He’s not involved in making any of the decisions,” Rosenberg said. “All personnel decisions, all the chairmanships, are going through the normal internal processes.”
The Globe article also mentioned that Hefner “mocked outgoing Senate President Therese Murray on social media.”
HOW LONG WAS LAST WEEK’S SESSION? During the week of Dec. 1-5, the House met for a total of two hours and 20 minutes while the Senate met for a total of two hours 54 minutes.