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Citizens panel: Legislators, reconsider your political pension payoff perk

Citizens panel: Legislators, reconsider your political pension payoff perk

Wayne Hoffman
June 3, 2016
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June 3, 2016

When a government board member compares a special perk for state lawmakers to an “insider trading” scheme, something sketchy is going on. The pejorative assessment came during the biennial meeting of the  citizens committee charged with determining legislators salaries and benefits.

Of the insider-trading-like perk, committee member and Pocatello attorney Reed Larsen stated, lawmakers “know those benefits are there. They know how to take advantage of them.” This time, the benefit in question is the cause of geometric increases in a legislator’s pension payout should she quit her roughly $16,000 annual elective-office position to take a six-figure state government job. Under state law, a legislator’s monthly pension can skyrocket overnight from a few hundred dollars a month to thousands of dollars per month.

Examples of the perk in practice are endless. Last summer, Sen. John Tippets quit the Statehouse for a job as director of the state Department of Environmental Quality. His pension is projected to go from less than $500 a month to more than $3,600. Likewise, Sen. Dean Cameron, appointed to lead the Department of Insurance, will see his projected monthly pension leap from about $700 to $4,500.

In all, about a dozen former state legislators are benefiting from this perk, designed by and for the benefit of legislators, many of them recent Gov. Butch Otter appointees. Unless this benefit is changed, undoubtedly more legislators will hit the pension-lottery payout. And, you’ll pay for it.

Former Sen. John Goedde, a member of the citizen compensation panel, noted, technically speaking, nothing stops a non-legislator state employee from seeing similar dramatic increases in his or her retirement pay. However, Goedde is a little disingenuous regarding the potential beneficiaries. A similar nosebleed hike in pension wouldn’t come by appointing a longtime, middle manager to lead an agency. Rather, a comparable pension boost could only happen if the governor appointed a life-long minimum-wage employee to the top of the government bureaucracy.

That’s implausible.

Legislators are likely to know of and seek open, top-level management positions. And, they’re also likely to have the political connections to get appointed to said positions, something that agency underlings won’t have. Hence the “insider trading” comparison.   

“It just smells to me,” Larsen said. Ultimately, the citizens committee, unsure of whether it had authority to unilaterally nix the politician-pension benefit, urged lawmakers to examine the issue come 2017. If lawmakers do take up the issue, it won’t be the first time.  In 2015, the House wisely passed a bill to get rid of the pension payoff -- but the measure died in the Senate without a hearing.

Though the pension benefit has almost no impact on the solvency of the state pension system, it does raise a number of other important concerns. State lawmakers should not be able to design and receive a special benefit just because they’re state lawmakers. The retirement benefit is lucrative only for them, not general state employees, part-time mayors or city councilors or other officials.

Of further concern, a governor should not have the ability to dangle a prospective state job in front of lawmakers as a carrot to help make them do his bidding. How likely is a legislator to challenge the governor when retirement pay could be jeopardized? How likely is that legislator to go to bat for a constituent against a wayward agency, knowing that he or she might get the golden ticket to one day lead that same agency? The potential of a cushy ride-into-the-sunset state government job dissolves the separation between branches of government. This politician perk makes it makes it more challenging for legislators to operate independently and on behalf of the people who elected them.

At the end of their meeting, the compensation committee boldly agreed -- unanimously -- that the Legislature needs to address the problem. Interestingly, the Legislature put the issue in the committee’s hands to resolve it. Boldly.

That aside, the compensation committee’s punt back to the Legislature faces a steep political hurdle. Just as it is nearly impossible to convince elected officials to limit their own terms or reduce their own power, it is a tall order indeed to get legislators to vote to limit their compensation and position perks, especially one so lucrative as the pension payoff. If it were easy, it would have happened this week.

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