One hot button issue this election season in Pennsylvania will most certainly be per diems paid to state legislators. The abuse starts with their House Rules. As you will read during the course of this post legislators get to play by different rules than the rest of the state employees.
When legislators passed their rules they made a choice. They most certainly could have chosen different wording when they wrote the rules. But just like parents talking to their children the taxpayers are trying to tell them what is not acceptable. But as you will see the legislators have the audacity to "tell us" what we don't understand. If you are a parent this post will resonate oh so ever loudly. In the next post the IRS will speak regarding their per diem payments. It may be time for legislators to rewrite the rules so they don't owe a slew of backtaxes.
The biggest audacity is a legislator who makes $78,314.00 per year as base pay but tells the taxpayers "If you want me to go to Harrisburg and represent this district (which is the reason I ran for this office) you need to pay me another $163.00 per day to do it, no questions allowed."
State lawmakers make most of per diems
By BORYS KRAWCZENIUK (Staff Writer)
Published: February 21, 2010
Most summers, when the Legislature is not in session, lawmakers still must cover their mortgage payments, she noted. Typically, the legislature is in session from January to June and September to November.
- Eachus, D-116, and his wife, Ellen, own a two-story brick townhouse listed as commercial property with apartments at 225 South St., near the Capitol building.
They bought it for $125,000 on Aug. 30, 2005, and have a $100,000, 30-year mortgage on it. The previous owner paid $82,000 for it at a 1996 sheriff's sale. The property is also listed as a source of income on Eachus' 2008 financial interest statement.
Efforts to reach Eachus were unsuccessful, but his spokesman, Brett Marcy, said House rules do not distinguish among types of lodging.
"He incurs food and lodging expenses so he deserves to be reimbursed for those expenses," he said.
"What you are getting at is whether this is permissible," he added. "The next question is whether it's right. We meet the threshold of whether it is permissible. He's following the rules."
Complete per diem records for 2009 were not immediately available. The latest records cover the period from July 1 to Oct. 9, 2009, which includes the Legislature's 101-day budget standoff, which resulted in unusual summer sessions.
During the standoff, Eachus collected $10,611 in 67 per diems, all at the full rates for lodging and meals.
So the first argument to the taxpayers is that they followed their rules. Its easy to do that when you slant them in your favor. The real question here is not whether the rules were followed. The real question is why did you think that slanting the rules in your favor would not go unnoticed or be tolerated by taxpayers, especially in this dire economic time.
As for the flat rate payment read about the IRS guidelines in the next post.
Brad Bumsted STATE CAPITOL REPORTER
Wednesday, September 30, 2009
The taxpayers' costs for per diems would not be incurred if a budget was completed by June 30, as required by law. In the past, the Legislature recessed for 2 1/2 months, starting on or about July 1. They have approved budgets late for the seven years under Gov. Ed Rendell, resulting in some July per diems. But the costs during this budget impasse are the highest since at least the 1970s.
The payments to legislators during the budget impasse "make me sick," said Judy Kandel, 67, a Canonsburg retiree.
"I think since they are getting their pay, they don't give a hoot. They're looking out for themselves, not the people," she said.
The House records cover per diems submitted as of Sept. 8; the Senate records, through Aug. 31. Not all legislators claimed their per diems for the two-month period.
Brett Marcy, a spokesman for Eachus, defended the payments as a cost of getting the budget done.
"These have been difficult times for all Pennsylvanians, but Rep. Eachus and House Democrats refuse to give up until the commonwealth has a fiscally responsible budget that remembers those who need help the most," Marcy said. "We're happy to report that we're very close to finalizing that budget. The per diems were reimbursements for expenses incurred during the course of that work."
Now we are being told the per diems are the cost of getting legislation
finished. Excuse me for a second. I thought getting legislation passed was in your job description. Where does it say that it can't happen unless a per diem is paid? The difficult times mentioned obviously isn't with our legislators. Their base salary is $78,314.00.
BY ROBERT SWIFT (HARRISBURG BUREAU CHIEF email@example.com)
Published: November 22, 2009
The payments, called per diems, are collected in addition to a state lawmaker's annual base salary of $78,314. The purpose of per diems is to reimburse lawmakers for lodging, meals and other expenses incurred while being away from home at the Capitol or attending a committee meeting in other parts of the state.
Twenty-five of the region's 30 senators and House members collected per diems from July 1, when the budget was due for the new state fiscal year, until Oct. 9, when the $27.8 billion budget was enacted, according to records provided by the House and Senate chief clerk's offices in response to a Times-Shamrock request under the state's Right-to-Know Law.
The total of per diems claimed is still rising because not all per diem payments for lawmakers have been processed.
If legislators had passed a budget by the June 30 deadline and gone on their traditional summer recess until mid-September, they would have had no or fewer opportunities to collect per diems.
Instead, lawmakers were able to claim a per diem up to $158 per day without needing receipts for much of the stalemate.
On Oct. 1, the Internal Revenue Service established a higher maximum per diem of $163 for the new federal fiscal year.
The founder of a Carlisle-based political reform group is critical of per diems, comparing them to a second salary for lawmakers.
"Under this second salary, they don't even have to pay taxes for the most part," said Tim Potts of Democracy Rising.
Among the Northeast delegation, House Majority Leader Todd Eachus, D-116, Hazleton, and House Speaker Keith McCall, D-122 Summit Hill, led the pack, taking $10,611 and $7,988 in per diems respectively.
As lead budget negotiators, both men were in Harrisburg many days during the impasse, including two holiday weekends.
Eachus said it was his responsibility as a leader to engage in the negotiations with Gov. Ed Rendell and Senate leaders and work out the compromises needed to pass the budget. While it took a long time to resolve, Eachus said the final budget came together in the way he hoped by maintaining health care for children, distributing additional money for education and providing enough recurring revenues so Pennsylvania doesn't have to reopen its budget like some states are doing this fall.
"We ought to be able to get through the next two years without a revenue increase," he said.
Eachus pointed out that lawmakers - unlike the governor - don't have a taxpayer-funded residence to stay in when they are in Harrisburg.
"These (per diems) are real expenses," he added. "It's a federally allowable expense. Many people think it's income, but it's not."
It may be an allowable expense if you follow their guidelines. There is also a huge question on whether it is income. Look what happened in Massachusetts. Finally, any legislator who talks like he is "entitled" to something including taxpayer funded residences is no longer representing the taxpayers' interests. It could be said "It's all about me."
Rules concerning per diems need to be rewritten
Published: February 25, 2010
As if any further proof were necessary, some state lawmakers helpfully have added to the case that their flat rate daily expense payments should be eliminated.
Lawmakers from districts outside the capital area receive per diem, or daily flat-rate payments that are meant to reimburse them for their expenses while in Harrisburg. That flat daily rate is $163, the maximum allowed by the Internal Revenue Service. Since the money technically is for expense reimbursement, it is not taxable.
It is an open secret, however, that the reimbursements add to the income of lawmakers who do not spend anywhere near daily $163 on expenses but collect that maximum amount without having to prove that they spent so much as a penny.
Borys Krawczeniuk of The Times-Tribune reported Sunday, for example, that at least five lawmakers from Northeast Pennsylvania - Reps. Jim Wansacz, Todd Eachus, Mario Scavello, John Yudichak, and Michael Peifer - own properties in and around Harrisburg where they stay while in the capital on business.
Yet they also collect per diem expenses that are meant to cover housing.
Some of the properties are mortgaged, but reimbursement for expenses cannot be intended to cover mortgage payments. If the money is used for that purpose it becomes a different animal because it builds the owner's equity in the property and would contribute to his profit when the building is sold. Other costs related to property ownership, including utility payments, property taxes and insurance, are not reimbursable expenses by even an expansive definition.
In some cases the lawmakers can rent apartments in their buildings, and sometimes do so to other legislators. That makes the property a business. Taxpayers should not have to contribute to lawmakers' businesses under the guise of paying their expenses.
All of this is permissible by House rules. Those rules, of course, are written by House members.
Lawmakers who wish to be Harrisburg landlords have every right to be just that. But in order to ensure that taxpayers are reimbursing them for their expenses rather than helping them to pay off mortgages or cover their extracurricular business expenses, lawmakers should rewrite the rules to provide reimbursements based on actual receipts for valid expenses.
The House Rules beg for overhaul. At least one lawmaker, Rep. John Yudicahk sees the light. It is a shame more weren't by his side.
Pa. legislators play by different rules on expenses
BY BORYS KRAWCZENIUK (STAFF WRITER firstname.lastname@example.org)
Published: March 1, 2010
When it comes to getting expenses reimbursed, Pennsylvania's legislators play by different rules than everyone else.
If you work for one of 48 state departments, agencies or offices directly under Gov. Ed Rendell's control, you have to have receipts to back up expenses when traveling on state-related business.
No state employee can skip providing receipts and still get up to $163 a day for lodging, meals and incidental expenses.
But a state legislator can.
The $163 a day is the federally established per diem rate - $111 for lodging and $52 for meals and incidental expenses.
Legislative per diems have long been controversial in Harrisburg because they do not require proof an expense was incurred. Legislators are eligible for the full amount simply for being in Harrisburg on state-related business.
By contrast, agencies under the governor's office treat the $163 as a maximum possible reimbursement, and employees are only reimbursed for actual expenses when they produce receipts, said Mia DeVane, a spokeswoman for Rendell
Per diems are allowed by the federal government and reflect real expenses incurred by lawmakers, House Majority Leader Todd Eachus, D-116, Hazleton, told the Scranton Sunday Times recently.
Lawmakers - unlike the governor - don't have a public residence to stay in when they are in Harrisburg, added Eachus.
The House rules on per diems follow the internal revenue code and can cover expenses beyond food and lodging that come from spending three or four days at a stretch in Harrisburg, said Stephen Miskin, spokesman for House Minority Leader Sam Smith, R-66, Punxutawney.
He said any effort to change per diem rules would probably come when the House adopts rules for the next legislative session starting in January.
Per diems rarely used as intended
Published: November 29, 2009
Sen. Lisa Baker of Luzerne County, for example, could have received per diem payments totaling $5,500. Instead, she filed for reimbursement of her actual expenses - $2,083 for lodging and food. Her actual expenses were just 38 percent of the allowable flat rate.
Rep. Todd Eachus, the House majority leader from Hazleton, claimed that the public has a misconception about flat rate per diem payments: "Many people think it's income, but it's not."
What, then, to call the $3,417 difference between what Ms. Baker actually collected and what she could have received from the flat rate?
Well, perhaps Ms. Baker is unusually frugal. But that's another advantage of keeping receipts, as business travelers know. They force you to keep your expenses down.
Credit goes to Ms. Baker and a few other lawmakers who accept reimbursements only for their proven expenses. Their conduct should become the model for new House and Senate rules requiring specific receipts for claimed expenses. The "per diem" rate should be, as intended by the IRS, the maximum daily reimbursement rather than the standard flat rate.
Editorial From WMGH October 8 and 9, 2009
IF YOU'RE A SENIOR CITIZEN ON A FIXED INCOME YOU MUST BE APPALLED WHEN YOU HEARvELECTED LEADERS GETTING OVER $7,400 FOR JUST 2 MONTHS. THAT'S $7,400 OVER & ABOVE BASE SALARIES EXCEEDING $68,000 A YEAR. AND HERE YOU ARE WITH YOUR MONTHLY SOCIAL SECURITY CHECK OF JUST A COUPLE HUNDRED BUCKS. WHAT'S MORE APPALLING-- WE ARE MORE THAN ONE-FOURTH INTO THE FISCAL YEAR & WE STILL DON'T HAVE A BUDGET.
MANY SOCIAL PROGRAMS THAT ARE SUPPOSED TO HELP SENIORS HAVE BEEN AFFECTED.
500 PUBLIC SCHOOL DISTRICTS HAVE MISSED 3 STATE CHECKS. MANY DISTRICTS ARE TALKING ABOUT TAKING OUT LOANS. INTEREST ON THOSE LOANS WILL BE PAID FOR BY TAXPAYERS, WHILE THE STATE CONTINUES TO ACCUMULATE INTEREST ON BILLIONS OF DOLLARS SITTING IN THE BANK. $532,585 IN PER DIEMS PAID FOR 2 MONTHS. SEPTEMBER & EARLY OCTOBER ARE NOT INCLUDED. WHILE LAWMAKERS POCKET MONEY FOR FOOD & LODGING, MANY CONTINUE TO PUSH FOR HIGHER TAXES & FEES. THE FACT WE STILL DON'T HAVE A BUDGET IS AN OUTRAGE.
LAWMAKERS ADD INSULT TO INJURY WITH PER DIEMS FOR FOOD & LODGING. IT'S SOMETHING VOTERS SHOULD REMEMBER WHEN GOING TO THE POLLS NEXT YEAR.
I'M MARK MAREK WITH THIS WEEK'S OLDIES 1410 WLSH EDITORIAL.
"The House rules are the foundation upon which all legislation is built. Better House rules will mean better laws for all Pennsylvanians."