Lawmakers find ways to increase pay

Expense money often collected in cash

Posted: Sunday, March 08, 2009

Some top Alaska legislators, including House Speaker Mike Chenault, R-Nikiski, have found ways to boost the $24,012 annual salaries that most think are too low.

As presiding officer of the House of Representatives, Chenault gets an extra $500 tacked onto his salary because of his leadership position. He gets a much bigger bump, however, by also pocketing his $8,000 office expense account as salary.

While most legislators submit receipts for purchases, Chenault and most of the leaders of the House and Senate collect all or part of their expense money in cash.

"For me, it's more of a management issue than anything else," Chenault said. "I certainly don't care if people know what I spend my office account on."

This means that when Chenault wants to buy snacks for colleagues, purchase paper plates for the office, or mail out a newsletter to constituents, he has to write a personal check. But he then gets to keep anything he doesn't spend.

He called the Legislature's system of accounting for purchases "antiquated" and said the rules about what state money could be spent on are cumbersome.

"For me, that $8,000 is money that's given to me to manage my office, and I think I ought to take responsibility for doing it," he said.

It also means that income taxes are collected on money that goes toward official expenditures.

Under the Legislature's rules - created by the body - members can either be reimbursed for their expenses, called the "accountable" method, or they can take their office expense accounts as an addition to their salary.

When they elect to do that, taxes are withheld and the amount is reported on the legislator's W-2 tax form as income, said Pam Varni, executive director of the Legislative Affairs Agency.

For representatives, that amount is set at $8,000. For senators, it is $10,000. That amounts to about a half million dollars per year in expenses to the state.

Legislators also are allowed to divide the amount, spending some on reimbursable expenses and pocketing the remainder as salary.

Another nine legislators do that, including Sen. President Gary Stevens, R-Kodiak, and House Minority Leader Beth Kerttula, D-Juneau.

Kerttula agreed with Chenault about the Legislature's accounting system.

"It's always a puzzle what's acceptable and what isn't," she said.

The State Officers Compensation Commission, which is recommending pay raises for legislators, decided not to consider expense account pay as "compensation" under its review.

The commission's official recommendations, produced in January, said "office expense accounts shall not be considered compensation" and thus are outside its review.

Salary Commission Chair Rick Halford acknowledged that "If you have to take it as income, you have to pay income tax on it," but said the commission did not have time to fully review the expense issue.

"We tried to look at the most obvious questions and not try to answer all of them," he said. "It's still subject to review next year and we may go back and look at that and some other situations."

The commission also looked at pay for the governor and other officials, but rescinded its recommendation for a pay raise for Gov. Sarah Palin when she said she would not accept it.

Halford said he also believed presiding officers should receive more than the $500 extra they currently receive.

Chenault said he typically spends more than that on snacks for caucus meetings. He said after taxes were withheld his $500 amounted to only $423.74.

Halford, a former Senate president himself, said presiding officers also work almost every day when the Legislature is not in session.

Halford also agreed with Chenault about the need for snacks at the caucus meetings.

"Generally, the legislative caucus meetings go better if there's something to eat there," he said.

Kerttula said she uses her office expense account for some of the munchies at some of her House Democratic caucus meetings.

Juneau's two other representatives last year, former Rep. Andrea Doll and former Sen. Kim Elton, both Democrats, used the accountable methods.

Other top legislators taking their pay as salary include House Majority Leader Rep. Kyle Johansen, R-Ketchikan, and Senate Minority Leader Gene Therriault, R-North Pole.

• Contact reporter Pat Forgey at 586-4816 or e-mail

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