The Big Cheese

May 8, 2014

Investigative Reports

Print Friendly, PDF & Email

 

Big Cheese Cartoon

ABOUT THAT $2 MILLION PAY RAISE FOR S.C. LAWMAKERS …

In last week’s Senate Finance Committee meeting, Chairman Hugh Leatherman at first acted somewhat surprised about a proposal to increase lawmakers’ pay by a collective $2 million annually.

“You mentioned in-district expenses, did you not?” Leatherman, R-Florence, quizzed Mike Shealy, the committee’s longtime budget director, after Shealy quickly read the proposal.

“Yes, Mr. Chairman,” Shealy replied.

What Leatherman didn’t disclose, however, was that he himself proposed the 100 percent increase in “in-district” expense payments at a recent closed Senate Republican Caucus meeting, several legislative sources, who asked that their names not be used, confirmed this week when contacted by The Nerve.

The plan to hike lawmakers’ monthly “in-district” income to $2,000 from $1,000 was first publicly revealed at the April 30 Senate Finance Committee meeting, long after the House Ways and Means Committee and full House had approved their versions of the 2014-15 state budget. Neither House version included the proposed pay raise for lawmakers.

Rep. Liston Barfield, R-Horry and a member of the budget-writing House Ways and Means Committee, told The Nerve Wednesday that neither the full House committee nor the subcommittee – of which he is a member as well – that reviews annual budgets for the two legislative chambers considered any proposal this year to raise lawmakers’ income.

The Senate Finance Committee last week approved the $1,000 monthly pay hike, which would be effective Jan. 1, 2015, by a 14-4 vote, Leatherman announced after a show of hands. Leatherman was among those voting in favor of it; Sens. John Courson, R-Richland and the Senate president pro tempore; Tom Davis, R-Beaufort; Joel Lourie, D-Richland; and Harvey Peeler, R-Cherokee and the Senate majority leader, cast “no” votes.

The proposed raise is buried in an obscure budget proviso (Proviso 91.13).

The full Senate this week began debating the state budget for next fiscal year, which starts July 1. Any differences between the House and Senate versions will have to be resolved through a conference committee – which typically includes Leatherman – before a final legislative version is sent to Gov. Nikki Haley, who will decide whether to issue any budget vetoes.

If approved, the pay hike for lawmakers would increase the fiscal 2014-15 budget of the 124-member House by nearly $1.49 million, or about 6.9 percent, to approximately $23.16 million. The 46-member Senate’s budget would increase by $552,000, or slightly more than 4 percent, to about $13.93 million with the pay hike.

On the Senate floor this week during the budget debate, Leatherman said next fiscal year’s proposed total budget emphasizes education. He didn’t mention the proposed overall $2,040,000 pay hike for lawmakers, which could fund, for example, 40 full-time teachers annually with a salary and basic benefits totaling $50,000.

As has been his longstanding practice with The Nerve, Leatherman, who also serves on the powerful five-member S.C. Budget and Control Board as well as the State Transportation Infrastructure Bank Board, didn’t respond Wednesday to written and phone messages seeking comment. Senate Finance staffers, including Shealy, also didn’t respond.

Currently, most lawmakers receive a base annual salary of $10,400, plus $12,000 yearly in “in-district” expense payments, for a total taxable income of $22,400. In a 2010 analysis of lawmaker expenses, The Nerve found that when mileage reimbursement, “subsistence” payments for hotels and meals during legislative session, and other expenses are thrown in, legislators received an average of $32,000 per year for serving part time in the Legislature.

At last week’s Senate Finance hearing, Leatherman tasked Shealy with reading the budget report of the Appropriations Bill Constitutional Subcommittee, chaired by Sen. Ronnie Cromer, R-Newberry, after noting that Cromer wasn’t present then at the meeting.

Shealy said there are “several important increases through Sen. Cromer and his subcommittee,” mentioning last the proposal to increase lawmakers’ in-district payments.

But the proposed pay hike never went through Cromer’s subcommittee, which also includes Sens. Larry Grooms, R-Berkeley and Floyd Nicholson, D-Greenwood, Cromer said when contacted by The Nerve this week.

“I didn’t even know until after the meeting that it had been proposed,” Cromer said, noting he was absent from the meeting a little more than an hour because of another unrelated meeting he had committed to attend. “I was just shocked when I got back and we were so far down the budget. It had not happened to me before.”

Cromer said the pay-raise proposal had not come up in any of his subcommittee meetings in the two years he has been the panel’s chairman. He said had he been present when the full committee last week voted on the proposal, he would have voted against it, as well as against the total state budget.

Peeler made the same point before his vote last week.

“It concerns me if this passes, then I’ll have to vote against the budget,” Peeler said to Leatherman. “I feel that strongly, and I told you this early on.”

After initially acting as if he didn’t expect the proposal, Leatherman pointed out there has “not been an increase in compensation for House and Senate members in 20 years,” noting the monthly in-district payment was set at $1,000 in 1995.

Leatherman said he contacted the state Board of Economic Advisors for a comparison of gasoline prices between 1995 and this year. According to the BEA, Leatherman said, $1,000 worth of gasoline in 1995 would cost $2,968 today with inflation.

“I’m sure (legislative) members will welcome that,” Leatherman said about the proposed $1,000 monthly increase, though he added, “It doesn’t even get them equal in buying power.”

“Every time I pull into a gas station and fill up, you’re looking at a minimum of $70, $75, $80 every time you do it,” Leatherman said, who, according to Florence County property tax records, owned a 2007 S550 Mercedes Benz and a 2004 Cadillac Escalade last year. “So those who have the big districts really have been taking a beating on this.”

Under state law, lawmakers who currently receive legislative pensions while still in office can’t receive the $10,400 base salary, though they can continue taking home their $12,000 annual in-district income. Leatherman was among 18 senators receiving legislative pensions as of late 2011; nine House members also were getting pensions at the time, The Nerve reported in April 2012. The law was subsequently changed  to close the legislative pension system to legislators elected at or after the November 2012 general election.

In 2013, Leatherman, who has been in the Senate for 33 years, received $36,148 in retirement income and another $31,250 in Senate income, which included in-district payments, according to his annual income-disclosure statement filed in March with the State Ethics Commission.

Whether Leatherman’s pay-raise proposal, if approved, would increase already generous legislative pensions for eligible lawmakers remains to be seen. Their pensions are based on a formula that includes “earnable compensation” – the base salary plus in-district payments.

If that formula is changed to reflect the increase in in-district payments, certain lawmakers could get bigger golden parachutes at taxpayers’ expense.

Reach Brundrett at (803) 254-4411 or rick@thenerve.org. Follow him on Twitter @thenerve_rick. Follow The Nerve on Facebook and Twitter @thenervesc.