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What Happens to Lawmakersâ?? Pay During State Government Shutdowns?

Harris Kenny
August 23, 2011, 3:31pm

Minnesota’s state government shutdown lasted for three weeks and grabbed headlines until the budget impasse was resolved on July 21, however one facet of the shutdown took longer to sort out: lawmakers’ pay.

In Minnesota, state employees that are designated nonessential status do not receive pay during government shutdowns – this policy affected approximately 22,000 state employees during the July 2011 shutdown. On the other hand, Minnesota House of Representatives rules allow legislators to reject, defer or accept their pay during shutdowns.

The Associated Press reports:

Eighteen Minnesota House members who declined paychecks during last month’s state government shutdown got their full salaries retroactively, the House payroll office said Monday… Another 32 state representatives followed through on a shutdown pay cut averaging $1,600, representing the amount they would have earned during the shutdown. The remaining 84 House members were paid normally during the shutdown. Fourteen senators who declined shutdown pay didn’t have the option of getting it retroactively.

There are no clear political points to be made here. Lawmakers from both sides of the aisle and across the state chose to reject, defer and accept pay from the shutdown period. Lawmakers worked differing amounts during the shutdown and they are spending their pay differently after receiving it (for example some have announced they’re donating their pay to non-profit organizations).

The more interesting story here is the role between legislator compensation incentives and budget negotiations. The following assumptions are made assuming all other things equal:

All that being said, there are a wide range of other factors that impact budget negotiations, including but not limited to: legislator net worth, budget deficit magnitude, media coverage, duration of the shutdown, etc.

No one incentive structure is objectively “best” because each set of incentives contains competing tradeoffs. As states continue to grapple with budget deficits it would be wise for policymakers across the U.S. to revisit state rules on legislator pay to ensure they’re comfortable with the tradeoffs they would be forced to make.

Read more of Reason Foundation’s coverage of Minnesota’s state shutdown here, here and here.

Harris Kenny is Policy Analyst

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