Pay hike for governor likely to fail, but bill deserves thorough hearing

24 Jan 2017 12:53 PM | John Ketzenberger (Administrator)

Sen. Randy Head’s proposal to raise the salaries of the governor and other state executives is timely. It’s hard to see a path to enactment right now for Senate Bill 60, but Sen. Head can make a good case for it.


There are few more loaded issues than pay for public officials. You can look no further than the failed attempt in the Indianapolis City-County Council earlier this month for evidence. The case on its merits was compelling: councilors here are paid less than their counterparts and have more responsibility, but the mechanism identified to pay for the raises was its political Achilles Heel.


The case for the state executive pay raises is even more compelling, but first let’s look at Sen. Head’s bill. It proposes raises for the governor, lieutenant governor, secretary of state, auditor, treasurer, attorney general and superintendent of public instruction, commonly known as the statewide office holders. The bill proposes to make the governor’s salary equivalent to that of the Marion County Circuit Court judge and the other statewide officeholders would be paid 85 percent of that salary.


Office

Current Salary

Proposed Salary

% Change

Effective Date

Governor

$121,233

$141,311

16.6

1/11/2021

Lieutenant Governor

$89,996

$120,114

33.5

1/1/2018

Secretary of State

$78,584

$120,114

52.8

1/1/2018

Auditor

$78,584

$120,114

52.8

1/1/2018

Treasurer

$78,584

$120,114

52.8

1/1/2018

Attorney General

$94,538

$120,114

27.0

1/1/2018

Super. Of Public Inst.

$94,538

$120,114

27.0

1/1/2018

Source: Legislative Services Agency


At first glance, this looks like a most generous raise. Indeed, the percentage increases make the raises so politically difficult. In context, however, the raises look much more reasonable. Indiana’s governor is the lowest paid in the five-state region by a significant margin.


State

2016 Salary

% of Nat’l Average

Illinois

$177,412

129%

Indiana

$111,688

82%

Kentucky

$140,070

102%

Michigan

$159,300

116%

Ohio

$148,886

108%

 Source: The Council of State Governments


Even with a raise in four years, Indiana’s governor still would lag all but Kentucky in pay.


Here’s another way to look at it. The Indianapolis Business Journal (subscription required) recently identified 45 people who are considered among the governor’s key staff. About half of them, 23, are paid more than the governor (the salaries of two others are unknown). Even with a raise, the governor would make less than 10 of his key staff.


Paying the statewide elected officials more wouldn’t be a big hit to the state’s treasury. The raises would cost about $250,000 more a year between fiscal years 2018-20 and then about $290,000 more in fiscal year 2021 and beyond, according to a fiscal analysis by the Legislative Services Agency. It’s equal to 0.0019 percent of the state’s total budget, or in other words, is a rounding error.


Pay typically isn’t the motivating factor for people to run for statewide office, but it could be a deterrent. Also, there is a good argument for paying high-ranking elected officials an amount that reflects the responsibilities of their positions and is closer to par with similar positions in the private sector.


Still it’s a hard sell politically. Wages for all Hoosiers rank just 38th nationally on a per capita basis and growth has been about 1 percent a year since the recession ended more than seven years ago. Since taxes they pay foot the bill for government, and there’s already a proposal to raise other taxes to pay for road and bridge construction, it’s likely lawmakers will hold off on Sen. Head’s bill.


It’s telling the bill was assigned to the Civil Law Committee instead of one of the Senate’s two fiscal committees. It’s a good place for the bill to get the thorough hearing it deserves, and that will give Sen. Head and others more information to bring the bill back next session.


Indiana Fiscal Policy Institute

One American Square Suite 150
Indianapolis, IN 46206
PH 317-366-2431


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