A citizens committee tasked with deciding legislator pay and benefits punted Wednesday on finding a fix to a scheme that enriches lawmakers who take high-paying state jobs.

The six-member panel declined to take direct action, but instead voted to urge the Legislature to fix the scheme.

The Catch-22: Many in the Legislature wanted the citizens panel to fix the problem.

Since the early 1990s, Idaho legislators have been able to boost their publicly-backed pensions through pension-spiking.

Here’s how it works: A legislator serves a long term in the Capitol, and pays a small sum into his retirement account from the part-time salary. He then wins a gubernatorial appointment to a high-paying state job.

The former legislator stays in that post for at least 42 months. After that, the pension system converts his part-time service in the Capitol to full-time under the high salary rate of the state job.

This skyrockets the legislator’s annual pension, at the expense of Idaho taxpayers. Pension increases of 500 percent, even 600 percent or more, are common. Last year, this perk spiked a former legislator’s retirement fund payout by more than 816 percent.
Two lawmakers, Republican Reps. Kelley Packer of McCammon and Steven Harris of Meridian, attempted to end the scheme through legislation in 2015. However, Senate Pro Tem Brent Hill, R-Rexburg, sent the bill to a pet committee to die.

Harris had planned to try again in 2016. His bill would have had to go before the House Commerce and Human Resources Committee, whose chairman signaled he wouldn’t hear it.

That chairman, Rep. Stephen Hartgen, R-Twin Falls, voted for the 2015 reform bill in committee, but flipped-flopped on the issue during the House bill’s floor hearing.

The Idaho House passed the bill in March 2015, despite Republican leadership’s furious play to kill the measure. During the House floor hearing, Hartgen and others argued that the Idaho Legislature didn’t have the authority to set its own compensation because such action is prohibited by the Idaho State Constitution.

During Wednesday’s meeting at the Idaho Capitol, citizens panel members also questioned their authority to resolve the matter.

“Who gets to decide if legislators are full-time or part-time?” asked panel chair Deb Kristensen. “I don’t believe that’s us.”

Such is the multi-million dollar question no one can answer. If lawmakers are full-time workers, the conversation likely dies. But the state classifies -- and pays -- lawmakers as part-time employees, which has led to the pension difficulties.

Deputy Attorney General Michael Gilmore weighed in on which body should take action and suggested the Legislature and the panel may need to work in tandem. He noted, the law doesn’t offer clear direction on how to clean up the loophole, even though the Legislature itself created the scheme through legislation in the 1990s.

Pocatello attorney Reed Larsen didn’t mince words as he offered his take on the arrangement.

“It’s almost like insider trading,” Larsen said. “[Lawmakers] know those benefits are there. They know how to take advantage of the system.”

But panel member Eva Gay Yost said lawmakers perform their duties year-round, not just the first three months of the year during annual legislative sessions.

Larsen stood his ground as Yost and former state Sen. John Goedde, R-Coeur d’Alene, defended the pension-spiking arrangement.

“It just smells to me,” Larsen said. “I don’t think it should be an additional avenue of compensation.”

Larsen declined to say if lawmakers are full- or part-time, but signaled that even classifying them as part-time would leave the problem intact due to low legislator pay. He noted, large pension payouts typically require substantive pension contributions for a long period, which the legislative pension scheme lacks.

The committee voted unanimously to recommend the Legislature address the problem, a suggestion it will include in its report to lawmakers. Even if lawmakers accept the report, they don’t have to take action on that item.

The panel also voted to give lawmakers a 2 percent pay raise each of the next two years. If lawmakers don’t reject the panel’s report, the raises will take legislators from $16,684 this year to $17,358 in two years.

The panel declined to raise legislator per diems, constituent service payments, or the $4,000 extra pay for the Senate pro tem or speaker of the House.