When a highly regarded Dayton administration commissioner recently departed for greener pastures at the head of an association of Minnesota health insurance plans, we expected to hear an all-too-familiar howl about low executive-branch salaries sending another able leader packing.
Then we learned that state agency head salaries aren’t so low any more. This year, state law allows top administrators to pull down up to $164,350; the Dayton administration plans to authorize salaries ranging up to $155,000.
That’s an important step up from the $108,393 per year that state agency heads were permitted each year from 2000 to 2012 and the modest raise to $113,817 they got in 2013. Deputy and assistant commissioners and specialists throughout state agencies — 365 people in all — were similarly denied pay raises for more than a decade. Salary compression was so widespread that midlevel managers and their bosses took home paychecks of essentially the same size.
More than a decade of flat salaries — limited by state law to 95 percent of the governor’s pay — had created a recruitment, retention and management problem at the top of a number of state agencies. It wasn’t just that more money could be had in the private sector. State agency pay also was lagging other parts of the public sector, with city managers and school administrators in larger jurisdictions making tens of thousands of dollars more than state officials. Agencies’ inability to reward good performance with higher pay took a toll on state operations.
That picture changed in 2013, when the Legislature bumped the statutory limit on agency head salaries from 95 percent to 133 percent of the governor’s salary and allowed them to climb with inflation thereafter. The 2013 Legislature also gave the governorship its first raise since 1998 (see accompanying text). The new law directed the governor to establish objective criteria for evaluating agency-head performance and to base compensation on those evaluations. That system is now in place, Jim Schowalter said on Jan. 2 — his last day as Minnesota Management and Budget commissioner.
“This is a lasting improvement in the capacity of state government to operate well,” Schowalter said. “It’s a recognition that there are selected places in state operations where the state needs to recruit and keep experience and top talent. While public service and the challenge of these jobs are huge incentives to attract talented people, competitive pay is also necessary.”
Schowalter left after 20 years in state financial management — four of them as head of state government’s financial nerve center — to become president and chief executive of the Minnesota Council of Health Plans. He acknowledged that the chance to earn more was one of many factors in his decision to leave state service. But he said he’s glad to have helped engineer a compensation boost for his successor and former colleagues — and maybe for himself one day, should he decide to return to state service. “It’s the ability to replace, and to recruit back, that we’ve enhanced, and that makes state government more viable going forward,” he said.
We agree. That’s why we welcome the pay raises that came in 2013 in both the executive and judicial branches — and wish the Legislature had found the courage to raise its own pay, too. Legislative salaries stalled at $31,140 per year in 1999, and though expense payments have risen somewhat in the intervening years, low compensation has become an impediment to candidate recruitment. The result is a body in which relatively few people in their prime earning years can afford to serve. There has also been a steady exodus of promising young legislators just as they become skilled lawmakers.
Rather than act in 2013 to raise legislative pay in 2015 — as the state Constitution would have allowed — the 2013 Legislature opted to ask the 2016 voters to change the Constitution. Voters next year will decide whether to remove from the Legislature the power to raise its own pay and give that authority to a bipartisan commission made up of appointees by the governor and the Supreme Court chief justice. That idea was first advanced by a bipartisan advisory commission in 2009, which warned: “If elected public officials are not fairly compensated, we may not be able to attract highly qualified candidates who are broadly representative of the Minnesota citizenry.”
In some state House races last fall, GOP opponents of higher legislative pay accused DFLers who voted for the 2016 amendment of “trying to make legislative pay raises easier.” To that, we can only say we hope so.