March 29, 2013

Both Sides of the Chafee Raises

Patrick Laverty

I have to admit, I'm torn on this one. The headlines and many people are screaming because Gov. Chafee wants to give two 3% raises to his cabinet members, just six months apart. Yeah, he wants to give more than a 6% raise, in less than a year to directors already making well into the six-figures. How dare he!

Additionally, last year the Governor balked at giving URI faculty raises.

In April, Chafee denounced the faculty raises, saying they were inappropriate “at a time when Rhode Islanders are struggling and when other state employees are making a daily sacrifice to help the state remain fiscally healthy.”

But let's be fair and look at some more facts. These directors haven't had a raise since 2002. Yes, yes, they make six-figures, but if you want to have good people in the jobs, you need to at least pay appropriately. We're talking about fourteen people and the total given in both raises to the directors would be $111,590. Of course not a drop in the bucket, but also it wouldn't be unreasonable to call this the cost of doing business.

Lastly, also mentioned in the article is that the directors have been doing a much better job at meeting their assigned budgets. For the first time in a while, no supplemental budget is required. Ok, so maybe a response to that is "staying within their budget is their job, we're going to reward them for doing their job?" Well, yeah. Do we all think that we have to go "over and above" every year in order to justify any pay increase in our job each year?

I just keep going back to the lack of raises for the last eleven years. That sounds crazy to me. But I get that it's been lean times since then. Is it time to give these people an increase? Maybe a single 3% increase for the year is more appropriate? What do you think?

Clarification: The *positions* have not been given a raise in eleven years. The current set of directors have not been in the positions for that long.

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These people do the jobs for the prestige, power, and political connections. Some of them are multi-millionaires and own multiple homes. Salary is a distant consideration and has little bearing on whether they would stay in the job or not. The raises are insulting precisely because many or all of them are wealthy. It's like taking a hamburger from a little girl and giving it to a fat teenager.

Posted by: Dan at March 29, 2013 3:25 PM

I think the scary thing is that even though they haven't had a raise in 10 years, their pay rates are still on the high end of similar positions in neighboring states.

I can agree that you have to pay for good management, and their performance has been good. Perhaps a 3% raise should be the way to go.

Posted by: mangeek at March 29, 2013 3:28 PM

I don't have time to dig into this, but the governor has emphasized that their "positions" have not received increases. Is this kind of like an increase in step pay for teachers, on top of the raise they'd get for putting in another year?

Another question is how many of these political appointees have actually been in their current positions for 11 years?

Posted by: Justin Katz at March 29, 2013 4:32 PM

Justin - The salaries are set by statute, so yes, he is referencing the pay associated with the positions. It didn't make any sense to me either.

Posted by: Dan at March 29, 2013 4:38 PM

My payroll data has Booth-Gallogly taking home $151,480 in FY10 and $154,404 in FY11, roughly a 2% increase. Per the article, her pay has gone up something like another 1.6% since then. Another data set shows that it wasn't long ago she was making more like $111,956.

Maybe it was a promotion, but still, to imply that somebody whose pay has gone up almost 40%, from the low $100Ks to the mid $100Ks has been struggling along with no raise would be disingenuous anywhere but within government.

Posted by: Justin Katz at March 29, 2013 5:39 PM

We have two possibilities there: step increases or grade promotion. I'm more familiar with the Federal system, but I believe the RI state system works the same way. "Pay raise," as reported by politicians and the media, generally refers to an across-the-board increase in grade and step compensation amounts through a COLA. Step increases are based on longevity in the position, or occasionally performance if a step increase was not due that year. Thus, even when pay is "frozen," salaries will increase every year or two because of guaranteed step increases, which cannot be frozen absent a drastic law change.

Footnote 1: I am not justifying any of the above, simply reporting.
Footnote 2: I do not believe it is an accident that public compensation is difficult to comprehend.

Posted by: Dan at March 29, 2013 5:53 PM

It is interesting that high earners in govt come under scrutiny in this blog as do SNAP recipients. The amount of scorn assigned seems to be pretty equal. What never gets discussed here though, when government giveaways are aired, is the home mortgage interest deduction that adds 100 billion annually to the federal debt. No tea party flack, or Anchor Rising blogger, or Current controller sees any problem with this high end private earner welfare program.

Posted by: David S at March 29, 2013 8:47 PM

David, we're all volunteers here and do this as a hobby, so we can't exactly hit in every single topic under the sun. However if you feel that Anchor Rising is in need of a post against the mortgage interest deduction, I would encourage you to submit it as an Engaged Citizen post. I look forward to reading it. Thanks.

Posted by: Patrick at March 29, 2013 8:53 PM

The amounts are already outrageous.

I don't believe they are all so great to deserve that amount of compensation.
These are public service positions,pay them the state median earning or minimum wage.

Posted by: helen at March 30, 2013 4:10 AM

David S,

Your comment is unfair. A quick Google search will show that the mortgage-interest deduction has been a subject of conversation around here.

Admittedly, it's not a clear case in either direction. I'd be happy with a completely flat-percentage tax on all income. But if the tax code is going to favor certain behaviors and certain people, I think the mortgage deduction is a foolish favor to target.

Posted by: Justin Katz at March 30, 2013 7:35 PM

Thanks for the offer, Patrick. I may indeed do that. Justin Unfair? To Whom?

Posted by: David S at March 31, 2013 2:21 PM

David S writes: "What never gets discussed here though, when government giveaways are aired, is the home mortgage interest deduction that adds 100 billion annually to the federal debt."

Note the perspective--allowing people to keep their money is considered adding to "the debt." The debt, David, is caused by a gov't spending more than it takes in, period.

Finally, the mortgage deduction exists to incentivize home ownership, formerly a good thing in a stable, prosperous society. It is also a lesson of how a good idea can be twisted and abused over time: the deduction should end at a certain point--lets say 650K (jumbo) loan, but that in itself creates additional challenges. How does incentivizing single mothers and dependency on gov't aid to a stable and prosperous society?

Posted by: Mike678 at April 1, 2013 8:50 AM

"Note the perspective--allowing people to keep their money is considered adding to "the debt.""

Also stems from the mentality that Matt Allen pointed out: all money belongs to the government, which decides how all of it will be spent and on what. Wrong.

Posted by: Monique at April 1, 2013 6:21 PM
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