A larger per diem for legislators is a case of wrong incentives

The Charlotte Observer ran a story today under the headline “North Carolina legislators want to pay themselves more.”  There are all sorts of problems with this, but let’s start with the headline itself.  Legislators don’t want to pay themselves more.  They want to force the taxpayers of North Carolina to pay them more. I’m not just being pedantic.  These words really matter.  Every single dollar that legislators spend comes from taxpayers, including those dollars that legislators spend on their own salaries.  I’m inclined to believe that one of the reasons lawmakers of all parties and at all levels of government are so quick to waste money is that they forget this absolutely essential fact. It’s not their money, it’s the taxpayers’ money.

But beyond the headline, there are some other problems with the substance of this bill.  Legislators receive a daily stipend for food and lodging every day that the legislature is in session.  Currently that stipend is $104, but the legislation would increase it to $164.  The Charlotte Observer worked out what this would have meant last year, when the session went a lot longer than normal.

In addition to their various travel, meal and lodging stipends, most legislators are paid a $13,951 annual salary, which also has not changed in more than two decades.

They also receive $559 per month ($6,708 annually) as an “expense allowance.” Legislators in leadership positions earn more.

At 250 days, a $104 per diem for all 170 legislators would cost the state approximately $4.4 million. A $164 per diem over the same time period would cost $7 million.

This per diem is where I take issue.  If we’re not paying our legislators enough, then raise their salaries.  But we’re actually creating an incentive for them to stay in session longer!

Last year, we all bemoaned the seemingly never-ending session.  “For the love of all that is good, can you please just reach some sort of resolution and go home?!”  But we incentivize just the opposite.  How about not paying legislators to take longer and be less efficient.  Let’s pay them to get the job done and quickly.

 

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