Are the Alaska State Officers Compensation Commission pay raise recommendations for the governor, his commissioners, and the legislature reasonable? My basic response is "No." First round, the Commission only recommended raises for the administrative branch (governor and department commissioners), but not legislative branch. The legislature rejected it. All the members of the Commission then were either removed or resigned and governor appointed a whole new board which came up with new recommendations in a matter of days including a 67% increase for legislators.
I'm going to take a look at this from human resources perspective. While this isn't something I've spent my life on, I did teach human resources at the graduate level including compensation and I was involved in a major classification study at the Municipality of Anchorage - from helping write the RFP to working with the consultants - so I know a little more than the average person about how this should work.
Here are the basic issues for me:
- Compensation changes in large organizations are usually preceded by a study that gathers relevant data which becomes the basis and justification for the changes. The final report also would discuss the fiscal implications of increases in compensation. The report the Commission posted on its website in January is NOT a serious compensation study.
- Traditionally, commissioners of state departments, like US cabinet officers, serve for a relatively brief time. It's been considered an honor to serve one's state or country and good commissioners are respected for taking a break in the careers to serve the public. Those coming from the private sector often take a cut in pay to serve. Such servicet also makes someone more desirable for jobs after their service because they better understand how government works and they have personal connections that can be helpful. So prestige and public service, but not a high salary, have been the traditional remuneration for these kinds of jobs. No one seems to have discussed this.
- The Commission did not follow the steps listed in the statutes that establishes the Commission.
- Given that the first Commission recommendation was no raise for the legislature, and the second Commission's recommendation was a huge raise, there's the appearance that the governor was really offering the legislature a bribe so that he could get his own salary and those of his commissioners raised. This is obviously speculation. But it's consistent with the governor's reelection campaign where he basically offered voters a higher Permanent Fund check if they reelected him.
That's the gist of this post. If you want more details see below.
[I'm trying to give you some headlines to act as guideposts, but separating out the issues so neatly also hides the interconnectivity of the issues. I'm doing my best but also mindful if I wait to make this perfect, the issue will no longer be current.]
How to determine fair pay
There is no foolproof way to do this, but human resources experts have come up two standard, general approaches to calculating salary:
- What is a job worth? Classification and Pay studies try, in the simplest terms, to examine the duties of each job , the qualifications required for each job, and the value that work contributes to the organization. You can see more details here. It's an imperfect system at best as it tries to pin down and quantify many qualities that can't be quantified in a system that is constantly changing.
- Market analysis looks at what specific jobs get paid in other organizations in order to determine what pay must be given to compete for workers. This works best for common job types, but less so for more specialized positions. This system tends to keep high wage jobs high and low wage jobs low. You can learn more about this process here.
Large organizations often do a combination, trying balance both those strategies.
Commission Doesn't Seem To Have Done That
The Alaska Compensation Commission proposed significant raises. There is no evidence they did any serious data gathering or analysis to arrive at their recommendations.
The Compensation Report at the Commission's website basically says it was decided to increase legislative salaries by 2% a year to match inflation, but that hasn't been done. So let's add up all those years and bingo, here's the number. (OK, I'm being slightly facetious here.
You can see the study here. Don't worry. It's short. Two and a quarter pages, and that includes the cover page.)
This is NOT the serious report one would expect. The posted one was dated January 24, 2023. That's the one that didn't recommend any increases for legislators and was quickly voted down by those legislators.
The new Commission, quickly created after the legislature turned down the original Commission's recommendations, doesn't have a study up on the website, presumably because there was no time to actually do one between their appointment and their recommendation a couple of days later.
Basically, the January report reads more like something written by a bunch a guys meeting to play poker one night, but they have to get this recommendation out before they play cards.
"What do you think guys?
"Is this fair?"
"Yeah sure, that sounds good."
"We're done. Start dealing."
That is NOT how you run an efficient and effective organization. This is a good old boys style of operating.
Do we know what the cumulative costs of 60 legislators (40 house members and 20 Senators) would be? No.
What about the impact on the state employees' health system and retirement system?
What do we compare ourselves to?
Was there any consideration of how much Alaskans get paid compared to other state legislators? There is in a comment or two that observers made after the proposal went public, but was that part of their discussion?
The Juneau Empire writes very briefly about that:
"Alaska ranked 12th in legislative salaries in 2022, although it also is among 10 states that are classified as full-time legislatures whose members receive an average salary of $82,258, according to the National Conference of State Legislators. The raises would rank Alaska fourth among all states in 2022 (although other states’ salaries may have also changed since then), with California topping the list at $119,702 (plus roughly $210 in per diem)." (emphasis added)
Full time legislatures?
Is that from discussion among Commission members or research the Juneau Empire did? But even so, while the Alaska Legislature has exceeded its 90 day limit regularly in the last few years, calling it a full time legislature is something of stretch. Certainly it's not a full time permanent legislature. It meets for four or five months full time, then lots of members go back to their regular jobs. Do we want to continue with part time, amateur legislators? Do we want professional legislators? More on this below.
Size of population, land mass?
And how do we compare based on populations of the states? Alaska is the third smallest state (after Vermont and Wyoming) How difficult is being an Alaskan legislature compared to legislatures of other states? Ours is the smallest legislature in the country. By a lot, compared to most states, though a few - Delaware, Nevada - are close to our size. One could argue that means more work per legislator, or one could argue it means far fewer people to deal with and negotiate with which should make it easier.
Alaskan is also the largest state geographically, with at least one house district larger than many states, yet with few roads. On the other hand, manyAnchorage legislators could walk across their districts in an afternoon. It does seem reasonable evaluate pay of Alaska legislators based on how much it costs
- to get to and from Juneau
- to meet with their constituents (though electronic meetings are much more common these days, the reliability of internet can be terrible in many remote villages)
Other considerations that were raised in media coverage
Alaska Public Media reports that Senate President Gary Stevens said,
“I think the younger folks that are entering the Legislature, they deserve to have a livable wage,”
Compensation Commission Member Larry LeDoux is quoted in the Juneau Empire:
“I think if we’re really going to have a citizen legislature we need to have a salary that will allow citizens to maintain their households while they serve in the Legislature.”
One could argue that a citizen legislature is a more amateur legislature and shouldn't get paid professional salaries.
Professional or Amateur ("Citizen Legislator")
Do we have a citizen legislature or a professional legislature? What does 'professional' legislator even mean? One with many years of experience in the legislature? Or one with educational training and work experience in a field relevant to understanding the issues facing the state?
Surely we have a number of legislators who would qualify as 'professional' by those definitions. But we also have people whose basic qualification is that they are residents of Alaska with a party brand that is in the majority of their districts. And some sort of name recognition in that district helps.
Amateur suggests this is public service more than a career. That they just need enough to get by for a term or two. But people get addicted to the Juneau summer camp atmosphere and to the prestige that comes with being called Representative or Senator. And after two terms as a Representative or just one term as a Senator - the next term vests them in the State retirement system. But I appreciate the argument. I'd note that I did spend a session in Juneau blogging the legislature on my own dime. It's doable, but my kids were on their own by then.
Former legislator Adam Wool from Fairbanks wrote in a March 29, 2023 letter to the editor in response (sorry there's a pay wall) :
"But I feel compelled to counter the narrative I’ve been hearing lately that the current pay is not sufficient to entice legislators with young families to come to Juneau. As a legislator who had a young family, I find this untrue.
The salary of $50,000 per year, although not great is what a beginning teacher makes, and although it isn’t high, it isn’t low for a job that is only full-time for four months per year. The job also includes full medical benefits and a pension plan, another draw for a young family.
The tax-free per diem of $300 per day while in Juneau is much more than adequate. Many of us paid around $1,500 per month in rent; some even had roommates, which made it lower. A few rented bigger houses, some owned condos and one even lived on a boat he owned. Between restaurants, cooking at home, eating in the legislative lounge and the various dinners and receptions we attended, food totaled around another $1,500 per month. Altogether, that leaves about $6,000 per month of untaxed income to send home, making the salary closer to $80,000 per year."
Nat Herz, a reporter who covers the legislature, thinks they should get the salary raise, but cut out the per diem. That's not an unreasonable suggestion - though it has tax consequences for the legislators.
These are the kind of things a good compensation study would have looked at in detail instead of making broad generalization about pay and then suggesting a huge increase without any back-up data.
We also heard from the governor and a legislator that the State department commissioners' salaries were too low in an Anchorage Daily News article about the first recommendations that were voted down by the legislature:
"[Senator] Stevens said Dunleavy has told him that he has struggled to hire commissioners on their current $125,000-per-year salaries. Eagle River Rep. Dan Saddler, who worked at Division of Natural Resources between stints serving in the Legislature, said $125,000 may sound like a lot of money, but that it can be an impediment to hiring highly skilled administrators.
“There are more opportunities in the private sector for people with those administrative talents,” he said."
In it for the money or to do public service?
This, again, gets back to the issue of whether being a commissioner is a regular job that people apply for because of the pay, or a way for a seasoned professional to spend a few years taking a cut in pay to do public service.
A Brookings Institute study in 2002 which looked at Federal appointee salaries (not just cabinet secretaries) did not put much emphasis on the public service motive, but did say this:
"People who accept top federal appointments derive non-monetary benefits from their service, of course, and these benefits help to explain why government service continues to attract outstanding candidates. Many public-spirited Americans are eager to serve in influential or high-profile positions, even if the financial rewards are far below those obtainable in a private-sector job. Experience in a senior government job allows workers to acquire skills, knowledge, and reputation that may have considerable value outside the government. Few appointees say they are forced to accept a big cut in earnings when they leave federal office. More than one-third of the appointees who served between 1984 and 1999 say they modestly or significantly increased their earning power as a result of holding a senior administration job (Light and Thomas, 2000, p. 35)." (emphasis added)
The Center for Presidential Transition, answering the question "I Was Offered a Political Appointment—How Much Will I Be Paid?" in 2020, writes:
"The government does not pay senior officials the kind of money typically found in the private sector. In the government, you may run a multi-billion-dollar program with thousands of employees and make less (sometimes much less) than $200,000 per year. You should also not be surprised if you receive a political appointment and have subordinates who make more than you. Career employee pay is much more controlled by statute and regulations, and is not connected to the pay of political appointees."(emphasis added)
So what's a reasonable pay level for Alaska state commissioners? Chron lists the salaries of the top appointees in the US federal government:
"Level I Officials [highest Federal level]
Twenty-one federal officials have Level I jobs and earn $210,700 annually, as of 2018. These positions include all cabinet secretaries, such as secretary of state, secretary of defense and secretary of education, as well as the U.S. attorney general, U.S. trade representative, the director of the Office of Management of Budget, the commission of Social Security for the Social Security Administration, the director of the National Drug Control Policy in the Office of National Drug Control Policy, the chairman of the Federal Reserve and the director of national intelligence."
I doubt that any Alaska commissioners have more responsibility than the top people in the US President's staff. So this is easily a ceiling figure, though one could also argue being a Commissioner in Alaska doesn't carry the prestige of being a Cabinet member in Washington DC.
The Commission's Process Doesn't Follow Statutes
The Alaska Statutes clearly spell out some procedures the Compensation Board is supposed to follow:
(c) The commission shall meet at the call of the chair. Notice of a meeting shall be mailed to each member at least 20 days before the date scheduled for the meeting.
(d) The commission shall meet to discuss its findings and recommendations at least twice before submitting its final report to the presiding officers of each house of the legislature and the governor.
They did not give 20 days notice. They came up with their recommendations in about two days after being appointed.
They do not seem to have met twice. And if their "final report" is just the salary recommendations with no data to support those recommendations, they truly have no defensible basis for their recommendations.
There is no evidence they met twice.
What can the Legislature do now?
I'm not 100% sure. I can't find the statute that says what the legislature can do with the Commission's recommendation. I'm not sure one exists.
I did call Rep. Andy Josephson because he's a lawyer and until the last Redistricting Board changed the boundaries of his district, he has been my representative. I asked how much leeway the legislature has to change the Commission's recommendation. He thought they could vote for part but not all, but they couldn't change it. He said there was a statute, but couldn't immediately find it. He also said that since the legislature writes the statute, they could also change it. But, I responded, that defeats the idea of having an independent commission, rather than the legislators themselves, setting the legislative compensation. He agreed.
Rep. Josephson also reinforced the idea that this was a pre-arranged deal. That the Commission was set up to make this proposal. And since the Governor appoints the members, I understood that this came from the Governor's office.
Should the legislature approve the recommendations, could a member of the public sue because the Commission didn't follow its procedures? Anyone can sue, but I'm not sure how the courts would respond.
Last observation about the work the Commission should have done
Over the last few days, spending maybe 3-5 total hours on this, I'm offering you a lot more information about how to think about appropriate salaries than the State's Compensation Commission offered in their January report. The second Commission hasn't even posted their report, and given they came up with salary recommendations in about two days, I'm guessing they have no report. Though, what I've written is hardly a comprehensive salary survey and analysis that would normally be the basis of a professional report, it's way beyond how the Commission considered its recommendations.
Conclusion
The jobs of governor, state department heads, and legislators are fairly specialized and unique. Unlike organizations with hundreds of types of jobs, there are only a few types of jobs here and not that many comparables - the 50 states and the federal government. This sort of study is probably much easier and could be done in less time than such a study for Conoco-Phillips or the Municipality of Anchorage. It's not that hard, but the Commission didn't even make a symbolic effort to outline the issue and justify their recommendations.
The salary commissioners have let Alaska down. Their work is unprofessional and highly unworthy of the people of Alaska. They didn't even follow the statutory process. Our legislators need a fair compensation package, not a wholesale giveaway to get them to approve salary increases for the governor and his cabinet officials.
The legislature should reject these recommendations and ask the governor to commission a serious compensation study. Or the legislature could commission its own study. From what I can tell, they don't have the power (and shouldn't) to set their own salaries. Such a study would give them a basis for voting yes or no on the recommendations and/or could form a basis for the Compensation Commission to make new recommendations.
That's how things should go, from a legal and rational perspective. But this has become a very political (not partisan that I can tell) decision.
