Weighing Chafee's Proposal for Staff Pay Increases

Apr 8, 2013

Governor Chafee has proposed rewarding top state officials with pay raises. RIPR analyst Scott MacKay parses the pros and cons of  the governor’s plan.

Governor Lincoln Chafee says his cabinet members have been doing a good job and deserve raises of three percent in June and another three percent in December. It’s no surprise that the governor has been roundly criticized and not just by the talk radio peanut gallery.

State House Republican leaders, the Providence Journal editorial page and business groups have also hammered Chafee for the raises. Chafee says his top aides should get this bump in their paychecks because of their performance. He may have a point.

For the first time in memory, state government agencies have lived within their budgets and it will not be necessary to submit a supplemental budget to the General Assembly.

State revenues are increasing and there are tangible changes the taxpayer can actually see, such as not having to take a day off from work to get your license renewed at the DMV.

Whether Chafee is doing a good job or not depends on where you stand on his politics and whether you think Rhode Island’s government glass is half full or half empty.

Politicians should be judged on the situation they inherited, the resources they have to change things and their management and political skills.

When Chafee took over from Governor Don Carcieri the unemployment rate was 11.4 percent. It is now 9.4 percent. Chafe inherited the $75 million 38 Studios debacle from Carcieri and his Democratic General Assembly enablers. And too many of our state’s communities were flirting with bankruptcy.

On the down side, our urban public schools are failing too many poor children, the Rhode Island economy is not producing 21st Century jobs fast enough and property taxes, especially, remain too high.

So what’s wrong with Chafee’s pay raise plan for the top dogs of state government? This is where Chafee’s political skills are questionable. The timing is terrible. With so many Rhode Islanders unemployed or under employed, handing out raises for people who already make good wages doesn’t set a great example.

Then there is the governor’s refusal to honor a negotiated union contract giving University of  Rhode Island professors a three-percent raise. In tough economic times, why should top executives get better treatment than worker bees.

Yet, as is the case with much of what Chafee does, one can make an argument that the governor is wrong on the message, but right on the merits.

You can’t blame Republican lawmakers, such as House Minority Leader Brian Newberry, from objecting; as the opposition party, that’s his job.

But some of the other naysayers don’t pass the laugh test. Top executives of the Belo Corporation, the Texas company that owns the Providence Journal, have  received huge raises recently, even as the newspapers they own bleed readers and advertising and lay off workers. Belo CEO Robert Dechard’s salary went from $1.6 million in 2011 to $1.9 million in 2012, according to the Securities and Exchange Commission.

The Rhode Island Center for Freedom and Prosperity, a business-orientated think tank, hammered Chafee. The prosperity group, headed by retired major league baseball player Mike Stenhouse, insists that state government workers are overpaid compared to the private sector. They may have a case to make about the lower rungs of state government where workers have benefits that private companies years ago provided, such as health care and pensions.

If you look at the salaries of Chafee’s top managers, you’ll see they’re earning far less in state government make far less than comparable executives in the private sector. Take Richard Licht, state administration director. His earns $149,000  a year.

A former lieutenant governor, lawyer and lobbyist, Licht  is, in effect, the deputy governor, in charge of a sprawling budget of $8 billion and 15,000 or so public employees. Is there anywhere in the private sector where an executive in charge of that many workers and that big a budget is paid that little?

Licht is also a Harvard Law School graduate. He is being paid less than last year’s Harvard Law grad who decided to get into corporate law with a large city firm. And Licht is getting far less than executives who run such large non-profits as hospitals and universities.

If state employment pays so well, why do so many lawyers leave the attorney general’s office or the public defenders office for better paying jobs in private practice. Or why are so many private public relations executives former State House press handlers? And why do accountants leave state employment for CPA firms?

When it comes to salaries, there is that old Rhode Island joke about who is paid too much in our cozy state? The answer: Somebody who makes more than I do. Beat up the governor is you want on this one, but don’t try to claim that top state cabinet executives are overpaid.

Scott MacKay’s commentary can be heard every Monday on Morning Edition at 6:35 and 8:35 and on All Things Considered at 5:50. You can also follow his political reporting and analysis at the `On Politics’ blog at RIPR.org