"Overpaid" is in the eye of the beholder (updated)

Governor Terry Branstad begrudges the working poor a little extra money and wants to cut total compensation for thousands of state employees, whom he considers overpaid. But where his favorite appointees are concerned, Branstad uses bonuses or a housing allowance to evade salary caps on senior positions in state government.

Erin Jordan has the details in two must-read articles for the Cedar Rapids Gazette. Highlights are after the jump.

Jordan reported yesterday that Debi Durham, head of the Iowa Economic Development Authority, has received “retention bonuses” of at least $30,000 in fiscal years 2011 and 2012. Durham is set to receive another $30,700 at the end of the current fiscal year in June.

The bonuses push Durham’s compensation to $185,000, which is nearly 20 percent higher than the maximum $154,300 allowed by state salary caps. […]

Branstad spokesman Tim Albrecht did not return a phone message and email Monday seeking comment about Durham’s bonuses. […]

Durham also received $73,469 in travel and subsistence payments in fiscal 2012, which was the second-highest amount among nearly 60,000 state employees. International travel accounted for the bulk of the expenditures, with trips to Germany, Spain, Taiwan, China, Korea and Japan in recent years, [Iowa Economic Development Authority spokeswoman Tina] Hoffman said.

In Jordan’s December 16 story, she reported,

Courtney Kay-Decker, director of the Iowa Department of Revenue, received an $800-per-pay-period housing allowance for her first year on the job, ending March 15, 2012, that totaled $20,800. The portion that fell in fiscal 2012 raised Kay-Decker’s compensation to $175,012.

The maximum salary set by law for the revenue director is $154,300.

K. Brian London was hired as Public Safety commissioner in October at an annual salary of $128,890.

“Since this salary is the top of the pay range for your position, we are approving a $16,110 recruitment bonus effective at the time of hire,” Branstad’s chief of staff Jeff Boeyink wrote London in an Oct. 8 letter The Gazette obtained through an open records request. “This will bring your total annual compensation to $145,000.” […]

Former Iowa Gov. Tom Vilsack, now serving as U.S. Secretary of Agriculture, approved bonuses and salary increases totaling $221,000 for 19 agency leaders in 2003, putting nine employees over state salary caps, according to the Associated Press.

Former Gov. Chet Culver, who led the state during the national recession, stopped the practice of giving bonuses to agency heads, said Charlie Krogmeier, who served as Culver’s chief of staff.

Kay-Decker was also one of twelve state employees who received substantial relocation expenses during the 2012 fiscal year, Jordan found.

Branstad administration officials claimed that these agency heads are highly qualified and have saved the state money by finding efficiencies in government. In their minds, I suppose that justifies evading state law.

The Iowa House and Senate should restrict year-end or recruitment bonuses and limit other forms of compensation for the governor’s appointees. No one has to accept a job in state government. If the maximum salary is beneath Durham or Kay-Decker or London, they should stay in the private sector. If Branstad believes salary caps limit his ability to hire the best talent, he should lobby lawmakers to raise the maximum pay for agency heads.

That would look awkward when the governor’s asking thousands of lower-ranking state employees to take a real pay cut, though.

Please share any relevant thoughts in this thread.

UPDATE: Branstad spoke to the Cedar Rapids Gazette on December 18:

“Once in a while, there is a situation where someone has done an extraordinarily good job that should be considered for a bonus,” Branstad said.

Branstad approved an $800-per-pay period housing allowance for Department of Revenue Director Courtney Kay-Decker in June 2011 that raised her first-year salary by $20,800 to $175,000. The maximum salary set by law for the revenue director is $154,300.

K. Brian London was hired as Public Safety commissioner in October at an annual salary of $128,890 – the upper limit of his salary range – but Branstad authorized a $16,110 recruitment bonus to raise London’s pay to $145,000.

Branstad said he favors awarding bonuses over raising state salary caps.

“The difference between bonus and pay is that a bonus is a one-time deal,” he said. “A pay-rate increase is permanent, so it actually costs the taxpayer more. If a state employee gets a pay raise, that is the base on which they are paid from there going forward.” […]

Sen. Tom Courtney, D-Burlington, said he doesn’t like the way Branstad is skirting state salary caps to reward directors.

“If the governor wants us to pay more, why doesn’t he come to us and ask for it?” Courtney said, adding that the Government Oversight Committee should look at whether the governor overstepped his authority.

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