Speaker Denney seems skeptical of fixes to pension-spiking and per diem changes (video)

Speaker Denney seems skeptical of fixes to pension-spiking and per diem changes (video)

by
Dustin Hurst
January 3, 2012
Dustin Hurst
Author Image
January 3, 2012

(Note: This is part 1 of a five-installment interview with Lawerence Denney, R-Midvale, speaker of the Idaho House of Representatives.)

Last year a number of lawmakers used their legislative positions to increase monetary gains for themselves. At least one lawmaker is proposing a fix to the problems.

House Speaker Lawerence Denney told IdahoReporter.com that it’s likely legislation will come forward to change the per diem formula and pension spiking by legislators, though he warned that any legislation must be well thought out to pass.

Pension-spiking

Through the years, a number of lawmakers have gone from long careers in the Idaho Legislature to high-ranking – and high-paying – jobs in state government, moves that fattened their wallets in the short term and spiked their pensions in the long term.

Last year, two legislators, Sen. Bob Geddes, R-Soda Springs, and Sen. Joe Stegner, R-Lewiston, took this route, with Gov. Butch Otter appointing Geddes to the Idaho State Tax Commission oversight board, an $85,000 per year job, and Stegner taking the $124,000-per-year chief lobbyist job at the University of Idaho. If each man stays in his post 42 months, each will spike his public pension thousands of dollars annually.

Rep. Dennis Lake, R-Blackfoot, brought legislation to end the practice last year, but it never received a formal hearing. Lake promises to bring it back again early in the 2012 session, but Denney is skeptical of the plan. Lake’s contention is that legislative service – largely considered part-time work – shouldn’t count as full-time credit in the state retirement system if a lawmaker takes a high-paying government job.

Denney is a believer that legislators may be paid part-time wages at about $16,000 per year, but says there is more work than just the legislative session. “To do it differently is to say that being a state legislator is not a full-time job,” Denney said. “It’s really a full-time part-time job.”

Even if former lawmakers are reaping thousands annually in extra unearned benefits from the pension system, Denney says they are likely valuable in the high-paying government jobs. “I think most legislators are probably worth the amount of the high-paying job,” Denney said.

As for Lake’s potential legislation, Denney suggests compromise might be in order. “I think those hours (out-of-session time spent by lawmakers) should account for something,” Denney said. “Maybe we can come to some agreement that would be more equitable.”

Per diem changes

In October, it was reported that two senators, John McGee, R-Caldwell, and Curt McKenzie, R-Nampa, were taking extra per diem payments meant for lawmakers paying rent on a second residence during the 2011 legislative session, but sleeping in free locations. McKenzie, the report said, slept on a couch at this law office down the street from the Capitol while McGee stayed with his parents.

While there is certainly the imagery of taxpayer abuse in the situation, the extra per diem money also adds to the pensions of the lawmakers because the funds count as taxable benefits.

Federal rules say that if lawmakers live within 50 miles of the Capitol, their per diem counts as a taxable benefit and increases salaries in pension calculations. Legislators outside 50 miles are compensated the per diem through a check that doesn’t count for salary.

The speaker says that reform may be needed, but advises that he doesn’t want to make life harder for legislators living just less than 50 miles, especially in the wintertime. “I think we have to be careful of how we use that per diem, especially for those who live in those 50 miles,” Denney explained.

He acknowledges, however, there has likely been a misuse of funds. “I think there has been some abuse of that,” Denney said.

Lake told IdahoReporter.com he will bring legislation to fix the per diem situation, though he didn’t offer specifics on his plan.

The speaker says that the per diem should be viewed as a part of a larger compensation package, which he says isn’t incredibly valuable, but is necessary to keep some talented legislators in public service. “If you’re looking just at per diem, I think the per diem we get is very generous,” Denney said. “But, on the other hand, if you look at the overall package, I don’t think it’s all that generous.”

Denney added he likes getting his per diem in a check up front so it’s not taxed and he sees more of the funds directly.

(Coming Wednesday: Denney talks about the 2012 budget and the Occupy Boise movement. Video for the series by Mitch Coffman, IdahoReporter.com.)

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