New York State

What will a pay raise cost New York lawmakers?

Compensation Committee demands limits to outside income, but will that stick?

Governor Cuomo and Speaker Carl Heastie outlined an agreement on groundbreaking reforms to New York States ethics laws and rules

Governor Cuomo and Speaker Carl Heastie outlined an agreement on groundbreaking reforms to New York States ethics laws and rules Office of the Governor

New York state lawmakers can get a raise, but they got more than they bargained for when they voted earlier this year to establish a committee to determine their pay.

report released on Dec. 10 by the four-member New York State Compensation Committee makes recommended pay hikes contingent on the Legislature agreeing to limit outside income, legislative stipends known as “lulus” and meeting April 1 deadlines for passing the state budget. Although there is, of course, widespread support in the Legislature for the committee’s decisions on pay levels, some lawmakers say the committee has overstepped its authority by imposing these conditions for increasing legislators’ pay from $79,500 to $130,000 by Jan. 1, 2021.

There has not yet been a legal challenge filed against the committee’s findings, but lawmakers say they are keeping their legal and legislative options open as they examine the report. The Legislature could also stop these changes in their tracks but it would have to act by Jan. 1, 2019, according to the report, when the first of three scheduled pay raises would take effect. However, some lawmakers say that deadline does not matter because the legislation that established the committee only gave it the authority to either increase salaries or not.

“This is a serious policy discussion that should be conducted by the Legislature with public input,” said Democratic Assemblyman Thomas Thomas Abinanti, who also works as an attorney, “Not by a committee that has no power to make law.” Here’s a breakdown of the report, how it interprets the committee’s authority, and what it means for lawmakers in the years ahead.

Why does a committee report determine lawmakers’ pay?

provision included within the state budget passed earlier this year established the committee and gave it the authority to determine whether lawmakers deserve a pay raise, and if so, how large it should be. The legislative language also said that the committee could examine “non-salary benefits, and allowances.” It also stated that any increase in compensation would have to be fully implemented by Jan. 1, 2021 – and would be contingent on the “performance of the executive and legislative branch and upon the timely legislative passage of the budget for the preceding year.”

The report concluded that the Legislature and governor would meet the “performance” condition by passing its recommendations. If that happens, salaries would rise to $110,000 on Jan. 1, 2019 and would rise to $120,000 the following year if lawmakers pass a budget by April 1. Salaries would go up an additional $130,000 in 2021 if a budget passes on time once more. While the heads of state agencies and some statewide officials would also see pay raises, the Legislature would have to approve any increases for the governor and lieutenant governor, according to the report. Here are answers to the biggest questions about what the report said and where it will go from here:

How does the report limit outside income?

The committee modeled its approach on congressional limits on outside income, which are 15 percent of base pay. However, the report included a one-year grace period for lawmakers to make the transition to an $18,000 cap, effective on Jan. 1, 2020. The report also found that a complete ban on outside income would be counterproductive and limit access to serving in the Legislature.

What outside income is – and isn’t – restricted?

The report also defined what types of income would be affected by the cap.

The 15 percent cap would not apply to investment income, pensions, state salaries and benefits, intellectual property, income for work done before Jan. 1, 2020 or income from a business where a family member holds a controlling interest, “where the member's services are not a material factor in the production of income.”

Prohibited income includes having a fiduciary role at a business or nonprofit – except for the practice of medicine – teaching without approval from an ethics commission, and receiving financial advances on copyrighted works.

What does the report not affect?

The committee determined that certain issues were outside its purview. This includes recommending an automatic annual cost of living adjustment and enacting campaign finance reforms such as closing the LLC loophole.

Who still gets to receive the “lulus”

The report noted that New York lawmakers are eligible for far more more legislative stipends that their counterparts in other states. For example, only 15 Pennsylvania lawmakers, four California legislators and six members of the U.S. Congress receive stipends – yet, 160 members of the New York state Senate and Assembly receive extra compensation known as “lulus.” That will be reduced to 15 on Jan. 1, 2019, according to the report.

At that time, only some Assembly members will still be eligible for stipends, which will remain at the same levels as before. Eligible lawmakers include: the speaker, the majority leader, the speaker pro tempore, the minority leader, the minority leader pro tempore and the chairs and ranking members of the Ways and Means Committee and the Codes Committee. In the Senate, the temporary president, the deputy majority leader, the minority leader and the deputy minority leader will receive the same stipends as before along with the chair and ranking member of the Senate Finance Committee.

How else could the report’s recommendations be changed without a legal challenge?

In theory, the Legislature could vote by the end of this year to stop its own pay increases, but that’s not necessarily the last opportunity to change the conditions for their pay raises, as outlined by the report. It notes that the Commission on Judicial, Legislative and Executive Compensation will be re-appointed in June 2019 and would be empowered to make recommendations on changes that would take effect in 2021.

How could the report be challenged legally?

Some critics of the committee say that by restricting outside income, the committee is effectively transforming the Legislature to a full-time job. “When our republic was founded it was supposed to be a citizen represented government,” said Republican Assemblywoman Nicole Malliotakis. If serving means giving up one’s profession because of limits on outside income – in exchange for a salary that is well above the state or national median for a full-time occupation, it’s worth noting – then it will continue the trend towards career politicians rather than part-time legislators.

The committee’s recommendations also raise legal and state constitutional issues, according to lawmakers such as Republican Assemblyman William Barclay. He said that there are ongoing discussions among lawmakers about possible legal challenges. They might center around whether an unelected committee can demand such changes given that the Legislature itself is the body empowered by the state Constitution to make laws. According to this line of thinking, the committee was merely empowered to determine salary levels, not make legally-binding decisions on other issues. “I think we can make a very strong case that this is outside the committee purview,” Barclay said.

But before legal efforts can happen, it is important to see where the Democratic majorities in both chambers stand on the report, “Presumably they’re going to be conferencing it about what they’re going to do and whether they’ll accept it,” Barclay added.

Assembly Speaker Carl Heastie has said that he thinks it is problematic to tie pay raises to limits on other income – like in this interview with The Capitol Pressroom – though his response thus far to the report has been relatively muted: “As I review it,” he said in a Dec. 10 statement. “I will be guided by the principles of the sanctity of independence and respect for the legislative branch which are embedded in the New York state Constitution. Above all else, as a new Legislature is about to be seated, these principles must be maintained.”

With the report only having been released on Dec. 10, it’s hard to say how the legal process may play out, but “legal challenges are very likely,” said Republican state Sen. Phil Boyle.