Utah’s 104 part-time legislators shouldn’t get a direct pay raise next year, but their per-day salary should be combined with their current per diem to better reflect the compensation they are getting each year.

So says the volunteer citizen group, the Legislative Compensation Commission, whose recommendations automatically become law unless the Legislature rejects them.

Accordingly, if legislators during the upcoming 2012 Legislature don’t act the LCC’s recommendations, finally, after years of debate and disagreement, Utah’s 104 legislators will go to an annual pay scale, doing away with the much-disliked-by-some system of paying lawmakers on a daily basis.

Each two years, just before a general election, the LCC makes a salary/compensation recommendation.

In the following general elections, lawmakers argue, if citizens don’t like what they’ve done with their own pay, voters can kick them out of office.

In the coming year, says LCC chair Paul Williams, the current $117 per day lawmaker salary should be combined with the current $156 per diem to make a base pay of $273 per day.

The annual pay would be based on 60 working days per year – the current standard daily allowance that lawmakers are getting.

That covers the 45-day general session, which in 2012 begins Jan. 23, and for 15 additional days that cover interim study days or any special session days.

Thus – at least officially – a lawmaker’s base pay would go from $7,020 to $16,380, and would be considered an annual salary.

If a legislator missed a general session day or an interim day, he wouldn’t be financially penalized, as is now the case.

In theory, the new annual salary would NOT be a pay hike for any legislator. But in fact it likely would be a small in-pocket pay cut.

That’s because the change would have state and federal income tax consequences.

Currently all the salary is taxed, but only part of the per diem is, Williams told UtahPolicy.

Under the LCC combination plan, all the new salary would be taxable.

“This does have tax implications,” said Williams. “But we decided it was still best to move to an annual salary, even if that means their (the legislators’) take home pay would be a bit less” in 2013 and 2014 than it will be in 2012.

In any case, LCC members said that the current two pay options (daily salary and per diem) should be combined to provide for “greater transparency.”

“It’s now hard to see what (Utah) legislators are getting paid,” said Williams. And it is difficult to fairly compare Utah lawmaker pay to compensation legislators in other states are getting, he added.

When tough economic times hit state government several years ago, legislators voluntarily reduced their pay from $130 to $117 a day.

Over time various lawmakers, sometimes with the recommendations of the LCC, have tried to change how legislators are compensated.

There has been talk, as recently as last year, to move to an annual salary, and so not to pay legislators on a per-day basis.

The House leadership generally favored the idea in the 2011 general session.

But Senate leaders didn’t like that change. Some members of the smaller Senate historically attend more interim meetings than do House members. So the change could have actually been a pay cut from some of the more active senators.

In addition, legislators didn’t want to get any kind of a compensation increase last year considering state workers were not getting a pay raise.

“It was too difficult to get our changes to be revenue neutral last year (in the 2011 Legislature), said Williams. “So in the end it was voted down.”

Under the new annual pay plan, if legislators were assigned to a special committee that met more often (so they had more than 60 days a year in officially-paid days) they would not get more pay.

That may be a sticking point in the 2012 Legislature, where some of the more active lawmakers may see a pay cut under the new plan.

A great example of what an annual pay could mean is the 2011 Legislative Redistricting Committee.

While any committee member would tell you that they put in many more hours than they were actually compensated for, the committee still met dozens of times both throughout the state and on Capitol Hill in official public hearings.

Committee members were paid the $117 a day and the $156 per diem for each day of the official meetings. But in fact they put in many more hours of unpaid service.

“By and large we feel the 60-day pay schedule we would be fair, take into account any special committees (or task forces) except for the Redistricting Committee, which meets so often.

“Over time – the next 10 years (before the Legislature goes through redistricting again) – we feel that the Redistricting Committee or any other committee that meets often, can be addressed,” said Williams, who has been on the LCC for eight years and chair for the last three years.

Besides their daily pay and daily per diem, legislators are reimbursed for expenses, like hotel stays and mileage, for days they are officially working for the state. Those rates are determined by federal guidelines.

And under the new plan, as is now the case, legislators would be reimbursed for those direct expenses.

Under the current system, urban lawmakers who can stay in their homes and drive to the general session can put the $156 per diem in their pocket. But rural lawmakers actually have to use that amount for their extra expenses in staying in Salt Lake during the general session.

“With our changes that makes it more equal to serve,” said Williams.

Compared to state legislators in other states, Utah’s 104 lawmakers are not paid well, the LCC found in its review.

If Utah moves to the annual pay system as the LCC recommends, Utah lawmakers would be the 36^th poorest paid in the 50 states. To stay at the $117 daily rate, Utah would be the 47^th worst paid Legislature in the nation, said Williams.

Former legislator Peggy Wallace sits on the LCC.

“We have searched for ways to fairly compensate our legislators and we wanted to make sure that whatever changes we recommended did not reduce their level of compensation,” said Wallace. 

“If you consider an hourly rate using a standard work week (at the $117 level), our legislators are paid $14.63 per hour,” Wallace said.  “When you consider that they are elected to lead and manage our state, that amount is far below what individuals with like responsibilities would be paid. 

“By adding the existing per diem rate into their base pay we can raise that rate to $34.13 per hour” she added.   

Williams wrote in the LCC report: “We feel strongly that this is the best, most transparent way to compensate our legislators. “The challenge with the existing system is that it disguises the actual pay rate.  While the per diem is necessary to support them financially, its use isn’t clear cut one way or the other.  “It also creates inequity in legislator pay as rural legislators who must use their per diem to cover their expenses are making less than those who can stay at home during the session and use their per diem as salary.”

 Said Williams: “We feel this is a good solution to rectify those issues.”