Plop, plop, fizz, fizz: Here comes the annual, prime-time pay heist. Yep, it's time for the stealth pay raise or the Cost of Living Adjustment (COLA) for Pennsylvania's ruling class.
Leadership used to mean you led by example. During hard times, leaders made sacrifices. Lee Iacocca worked for a $1 year while Chrysler paid off its government loan. "I didn't take $1 a year to be a martyr. I took it so that when I went to Doug Fraser, the union president, I could look him in the eye and say: 'Here's what I want from you guys as your share,' and he couldn't come back to me and ask: 'You SOB, what sacrifice have you made?'"
Not any more. Remember the pay raise of July 5, 2005? Legislators' base pay was raised from $69,647 to $81,050 at 2 a.m. without public debate or public hearings. You may have thought the raise -- Act 44 -- was repealed with the passage of Act 72, but two weeks later on Nov. 16, 2005, a 3.6 percent COLA kicked-in with little fanfare and raised base salaries to $72,187.
After the pay jacking, behaviors were modified but they didn't change. The political elite continued to bill taxpayers for car washes, fine dining, "ghost employees," no bid contracts, and sucked down per diems like Jell-O shooters at a sorority party.
Legislative leaders certified a 1.98 percent increase in 2006 that increased base pay from $72,187 to $73,614. The following year, the stealth pay raise was 3.46 percent, or a $2,549 increase for rank-and-file legislators. The average base salary increased to $76,163.
The 2.8 percent COLA in 2008 increased salaries during a recession, but Gov. Ed Rendell led the charge for restraint. Rendell waddled to the sacrifice buffet and chastened the Legislature and 12.5 million residents of Pennsylvania: "I also want to remind people that the cuts are coming, and I don't want to hear any whining."
Between 2005 and 2010, the hierarchy of all three broken branches of government pocketed a 13.54 percent aggregate COLA. From 2006 to 2011, per diems zoomed from $141 to as much as $185 per day in June, July and August.
Legislators rewarded themselves for less productivity. They passed 226 new laws from 2007 to 2009 -- which was the lowest tally in 24 years.
Nothing has changed in Harrisburg's "shared sacrifice" zone after the seismic election on November 2, 2010, which gave Republicans control of the Governor's Mansion and the Legislature. One month later, fiscal conservatives and newly-minted freshman were awarded automatic pay raises of 1.7 percent as were the state's top bureaucrats and judges. The annual salaries for backbenchers increased from $78,315 to $79,623, compared to a base salary of $69,647 prior to the 2005 pay raise. Salaries for legislative chieftains rose from $113,468 to $115,364.
The raises are on top of defined benefit pension plans, free parking, generous health benefits, per diems, perks and PSAs.
The COLA bump also pumps-up pensions even if the money is donated to charity.
It's time to kill the COLA. Act 51 needs to be abolished -- or, at a minimum, COLAs should be announced one week prior to the general election, so voters can decide if a pay raise is warranted.
COLAs throughout state government ought to be pegged to accountability, merit markers, and performance milestones. We need to create an independent and nonpartisan Compensation Commission that evaluates these metrics.
In California, the Citizens Compensation Commission, which sets compensation for state managers, reduced pay across the board in 2010, including a cut in the governor's salary from $212,179 to $173,987.
We need to act soon. The next COLA kicks in on Dec. 1. Then the "shared sacrificers" will break for an extended holiday until January 2012, including a weekend jaunt to New York City for the Pennsylvania Society's annual political orgy at the Waldorf-Astoria.
We employ public sector managers, and it's past time to place a limit on their grazing habits. State government is a publicly held corporation with bylaws that specifically exclude perks, benefits and bonuses (Article III, Section VIII). If judges, lawmakers and senior management want a bonus plan, then they should either create a compensation commission or submit a proposal to taxpayers for ratification.
-- Eric Epstein is co-found er of Harrisburg-based Rock the Capital.