Gov. Dunleavy removes last hurdle for 67% pay raise for lawmakers, 20% raise for himself and cabinet

JUNEAU — Alaska Gov. Mike Dunleavy vetoed legislation Monday that would have blocked recommendations made by an independent salary commission, clearing the way for a 67% pay raise for lawmakers and a roughly 20% raise for the governor and his cabinet.

The Legislature passed a bill earlier this month disapproving recommendations from the Alaska State Officers Compensation Commission, when those recommendations left out a pay bump for lawmakers while granting increases to the governor and department heads. Days later, all members of the commission had either resigned or were abruptly removed from the commission by Dunleavy, and were replaced by five new members who passed amended recommendations after a 15-minute meeting.

The commission recommended increasing legislators’ salaries from $50,400 to $84,000 per year, matching half the new salaries proposed for heads of state agencies. That would be the first pay raise for legislators since 2010.

The former commissioners recommended in November that the governor’s salary should be increased by 21% from $145,000 per year to $176,000, representing an inflation adjustment and a 2%-per-year increase since his last pay raise in 2011. The lieutenant governor’s salary would increase by around 10% following the same formula to just over $140,000 per year.

Commissioners’ salaries would increase by 20% since their last raise in 2015 from just over $140,000 to $168,000. But there had been no changes proposed for legislator pay, which frustrated many in the state Capitol. In 2022, lawmakers rejected another set of recommendations from the commission that would have lowered their overall compensation packages.

A pay increase has long been called for by lawmakers who say they struggle to maintain homes in both Juneau and their home districts, and who say the limited wages help make the Legislature less diverse. There have also been concerns that the salaries offered for the heads of state agencies are no longer competitive.

“To continue attracting the best and brightest Alaskans to manage state departments, Gov. Dunleavy believes salary increases for commissioners that offset the impact of inflation are appropriate,” said Jeff Turner, a spokesperson for the governor’s office, through a prepared statement.

Turner said Dunleavy did not run to be governor for the paycheck, “But even the Governor of Alaska needs to earn a living and the salary adjustment is the first for the governor since 2011. Now that he is well into his second term, the salary increase will be in place when the next Alaskan to occupy the office takes over in three years.”

Under state law, the commission’s recommendations are released as a final report to the Legislature. The report becomes effective 60 days after it is introduced, unless lawmakers pass a bill to explicitly reject it.

The Legislature unanimously passed Senate Bill 86 on March 6, rejecting the previous commission’s November report. On Monday, the governor vetoed that bill.

“As amended, the report now provides a comprehensive compensation plan that includes the legislature. This bill is no longer necessary as the issue has been resolved by the amendment to the report,” Dunleavy said in a letter explaining his veto.

The Legislature must meet within five days in a joint session to override the governor’s veto, and again reject the commission’s recommendations with the new pay boost for lawmakers. Two-thirds of lawmakers would need to vote together to override Dunleavy’s veto.

Senate President Gary Stevens, R-Kodiak, and House Speaker Cathy Tilton, R-Wasilla, said they have heard little appetite from their colleagues to do that. Tilton said the Republican-led House majority caucus had not yet discussed a veto override.

After the previous commission failed to recommend a pay increase for lawmakers, Stevens said the Senate had a bill prepared to increase legislators’ pay to $84,000 per year, which would be half the amount paid to commissioners. The legislation had not been introduced, but Stevens said a copy had been shared with the governor’s office.

Shortly after the new commission convened last Wednesday, Duff Mitchell, the new chair appointed by Dunleavy, introduced a motion with the same $84,000 salary proposal for lawmakers. Mitchell said in an interview last week that the salary recommendations had come from the Legislature. He later added that he may have spoken about the idea when he was interviewed by a member of the governor’s office for the commission position.

The new legislator compensation package would not impact their per diem expense payments, which allow them to collect $307 tax-free per legislative day. Per diem payments add roughly $37,000 per year for legislators who claim them during an entire 121-day legislative session.

According to data gathered by the National Conference of State Legislatures, at least 30 states offer lawmakers lower base pay than Alaska’s, including several states that offer no base pay at all and guarantee only per-diem payments when lawmakers are in session.

Last week, Stevens said that Dunleavy had understood how important a pay raise was for lawmakers, and that he had pledged to do something after the Legislature rejected the salary increase solely for the executive branch. Stevens said Monday that Dunleavy gave him the pen he used to veto the Legislature’s salary rejection bill.

Alaska’s independent salary commission was established in 2008, in part so lawmakers would not need to vote to increase their own salaries. Under state law, the commission must meet and issue a report with salary recommendations at least once every two years — but it cannot release a report twice in a year.

The new commission’s recommendations were amendments to the previous report and not a new report, said Kate Sheehan, the commission secretary and director of the state Division of Personnel and Labor Relations. But the process used was unfamiliar.

“I was confused, to be honest,” she said. “I’ve never had this happen before.”

Sheehan said she had spoken to staff at the Department of Law, who advised her that the amendments to the report would trigger another 60-day window for lawmakers to act. They have until May 15 to pass another bill to reject the commission’s amended recommendations or they will come into effect automatically, she said.

The salary increases are set to take effect July 1 for the governor and commissioners, and in January 2024 for lawmakers.