Press "Enter" to skip to content

Merit Pay for Legislators—by Which Economic Metric?

Independent blogger John Tsitrian finds the Legislature’s proposed pay amendment reasonable, given that raising legislators’ annual pay from $6,000 to $10,200 is equivalent to what he calculates as a 2.75% annual raise each year since the current salary was fixed in 1998. (If we apply that pay raise in 2019, I calculate an annual rate equivalent over that 21-year span of 2.56%. If we look at the historical inflation rates I used in Tuesday’s fun post on state and county government spending, the average inflation rate since 1998 has actually been only 2.17%.)

But good businessman Tsitrian doesn’t like Mickelson’s selection of median household income as the criterion for future automatic raises. Tsitrian says legislators should use a metric that better reflects how good they are for business:

Given the nature of the job, I’d be more inclined to use an incentive-based system than one tied to household incomes or inflation By using changes in our state’s Gross Domestic Product as the measure by which legislative incomes are set, our elected officials would have a performance-based standard for setting their wages. On that basis, long term growth justifies an immediate increase. The last six years, however, have been slow-growing, averaging less than 1% a year since 2011, Governor Daugaard’s first year in office. During that period, U.S. per capita GDP has gone up at 30 times the rate of South Dakota’s.  This is pathetic [John Tsitrian, “South Dakota Legislators Need a Pay Raise, But It Shouldn’t Be Automatic,” The Constant Commoner, 2017.11.27].

From 2008 to 2015, per capita real income (I don’t see a household median option in the BEA interactive tables to which Tsitrian directs us) grew at an annual rate of 0.53% in South Dakota while per capita real GDP (both in chained 2009 dollars) grew at an annual rate of 0.73%. According to this Census data, real median household income over the same period grew at 0.65% annually. So arguably, tying raises to GDP instead of personal income would have produced bigger raises for legislators over that seven-year period.

But would they have noticed? Applying those percentage factors as pay raises over the next ten years, starting from $10,200 in 2019, 2029 legislators would see salaries of $10,757, $10,880, or $10,970. Would that variance of less than 2% register with legislators as any significant merit reward?

Our 2012 discussion of Governor Daugaard’s wrong-headed and rightfully rejected merit-pay plan for teachers left me suspicious of any proposal for merit pay. Setting pay for public servants needs to be first and foremost about offering salaries that will fill positions with qualified applicants. If merit pay has any merit for legislators, legislators will have to sift through lots of economic data to determine which if any of the various economic growth metrics would provide discernible more motivation for legislators to produce better legislation. Even then, the Legislature will be in for a big debate on the extent to which legislators, like governors and presidents, are responsible for any of South Dakota’s economic growth.

5 Comments

  1. Donald Pay 2017-11-30 09:28

    I’d cut the pay, and make them take drug tests.

  2. Dave 2017-11-30 10:54

    I still think we should run it like jury duty. we would most likely get better representation that way…

  3. El Rayo X 2017-11-30 12:28

    1998 to 2017 is water under the bridge. Our legislators are temporary, part-time state employees and should fall under Bureau of Human Resources guidelines. If the Governor announces a pay raise for state employees, then the legislators should get the same. I don’t know if part-time temps are eligible, but I’m sure the policy that defines it is already in place. Just a reminder, from 1998 to 2017, there were a few years raises were not given because of the budget.
    And Mr. Pay, the Hughes Co. Jail does have the 24/7 program. Legislator salaries could be contingent on blowing clean twice a day.

  4. Adam 2017-11-30 22:00

    The biggest obstruction to growing South Dakota’s economy is a phobia condition – outside of our population centers – which makes South Dakotans complacent on growth because outsiders would have to move here, intrude upon, and change their way of life. Bringing in higher paying jobs, means attracting more people, who would trot through our small towns with more money than current residents – making long time residents jealous. For instance, I saw a bumper sticker that says, “The Black Hills is NOT California – LET’S KEEP IT THAT WAY!”

    South Dakota has a culture of general complacency. We make more excuses for why we have so little, compared to most every other state than any other peoples I have ever known – in America. Decades of excuses are now culturally baked-in and it has resulted in a consistent lack of creativity and a compromised ability to back-engineer (in order to emulate and tailor) the policies that kept other states up to speed with the rest of the country over the last 50+ years.

    SD needs a new desire to attract outsiders and stop being so damn Sour Grapes about what other states offer their people. And that’s a fact. It’s the Sour Grapes that inspires a person to not seek what they believe is unattainable – even when it is actually attainable with ideas that you don’t yet have.

  5. Ryan 2017-12-01 08:36

    Dave and Adam – well said. I couldn’t agree more.

    Donald – rather than drug tests, how about we base our judgment of people on their job performance? If somebody takes drugs but he or she is a competent and effective public servant, shouldn’t their job performance matter more?

Leave a Reply

Your email address will not be published.