Saturday, July 21, 2007

Capital Editorial: City Officials' Pay

In a recent post, AP declined to comment on the timing of the proposed mayor and aldermen pay raise, opting instead to talk about the level of compensation. I have just brewed myself a double-strength cup of Colombian coffee from Caffe Pronto--no sugar, no cream-- and am now ready to continue my analysis of this topic.

First, some background information on the issue. Here is how the current system works:
-a committee of citizens is formed no later than 1 year before a general election to study compensation
-the committee submits recommendations no later than 9 months before the next general election
-a public hearing is held, then the city council can decrease, but never increase, the recommended compensation
-changes approved by the council must be approved no later than 3 months before the election, and go into effect for the NEXT city council

The mayor's proposal would:
-change the pay for the CURRENT city council
-tie pay increases to cost of living (inflation) increases
-this would, by necessity, change the charter of the city

The Capital ran an editorial in opposition of the proposal to raise the pay of the mayor and alderman. AP will now reprint this editorial, and offer insightful commentary on selected issues. As always, the bold font represents the text as it originally appeared, and the insightful commentary appears in normal font.

Businesses are struggling to maintain payrolls. People are losing jobs, or at least being denied raises. Even state government is leaving vacant positions unfilled.

True, perhaps, but remember: city government is distinct from state government, and it most certainly has a different role and structure than the private market. We should be careful when comparing government to the private market, because government exists to provide the services that cannot exist in the private market (public goods).

So when Mayor Ellen Moyer suggests a pay increase for herself and the city's part-time aldermen, we have to wonder if she and the City Council have lost their collective mind.

This blog spends the majority of its time wondering that.

If our elected officials want taxpayers to believe that times are bad and revenues are stretched thin, is it a good time to be pushing for a 3 percent raise?

I would say that the state politicians would like us to believe that the times are bad--see AP's posts on the 'doomsday budget'--but the mayor usually doesn't care about the prevailing conditions. She tends to do what she wants, when she wants, regardless of circumstance.

It's a rotten time.

Agreed, but for different reasons. It's a rotten time because it affects the current council.

The City Charter allows the council to adjust its members' salaries every four years in decisions that apply only to the new council seated after the next election--a protection, demanded in rulings by the attorney general, against elected officials sweetening their own compensation.

Now you're talking!

The council followed the charter in 2005 when it voted for raises for the next council, taking salaries to $70,000 for the mayor and $12,600 for each alderman. So why, then , is the council considering more raises--another $2,100 for the mayor and $380 for aldermen?

They are considering more raises because they are grossly underpaid for what they do. Click here to learn why.

Ms. Moyer says she is simply following up on the council's approval of a report--authorized by Dick Israel before he was elected alderman--that recommended making mayoral and aldermanic salaries more comparable to those in neighboring jurisdictions. Her proposal actually changes the charter, which wisely prohibits elected officials from immediately adjusting their own salaries.

This theme appears over and over in the Moyer administration: "Don't blame me, the process was already underway.", or "There is nothing I can do about this, it is a regional/national phenomenon." Note to the mayor: you can change whatever you want, or at least vote to change it.

Citizens should be outraged. The mayor and aldermen may change the charter to give themselves an out-of-step cost-of-living raise recommended by someone who is now on the council. There is a reason the charter protects the public from aldermen who give themselves raises. The charter shouldn't be changed.

Agreed, this is BS. But they need to get paid more! Keep reading to find out why.

We have another problem. Although the current salaries are very conservative, some city officials just don't deserve a raise--particularly those who spend more energy on solving problems outside the city than inside it.

Very conservative salaries = grossly underpaid.

The memorable debate on banning toy guns has been succeeded by one on banning plastic bags. The council has gone after alleged racism at Annapolis High School, the Annapolis Symphony Orchestra and finally the Naval academy--none of them institutions over which it has any authority. It apologized for slavery--is an apology for the Iraq war next?


A serious municipcal subject, traffic congestion, was handled by paying $150,000 for a study that told the city nothing--and so nothing has been done. Market House struggled to re-open and a new police building has been falling apart. We won't even talk about crime,

good, because I am getting tired of typing...

which no one in City Hall seems to think is a big issue.

City Hall is a small place--they can't think of everything. Just kidding....Hallelujah!

For this they deserve a raise?

No, they don't, not for this. But in general, they do. Please keep reading...the big analysis is to come!

How about a performance evaluation instead?

So, let's give the mayor and aldermen a performance evaluation. E-mail us your comments--good and bad--at We'll make sure they know how you feel.

Attention, that would be a long about you just click on this site to see how I feel.

Ok, let's do some analyzing.

In economics, labor theory says that a person is paid exactly the value of what they produce. Many times this is hard to calculate, but let's look at a simple example. Let's say Billy can cook $20 worth of cheeseburgers per hour. Now, let's say that Billy takes a job at McDonald's, where he earns $15 per hour. Burger King realizes that they can pay him $16 per hour and hire him, while still making a $4 per hour profit on Billy. Then McDonald's says: heck, we can hire Billy back, pay him $17 per hour, and still make a $3 per hour profit. The process continues until Billy makes $20 per hour, which is his worth.


(This is a very simplified analysis. Actual wage theory takes into account utility--not just pay--and also takes into account the cost (rent, utilities, overhead) of the worker, not just his value. Email me if you are a glutton for punishment and want a complete explanation of this idea.)

An alderman makes $12,600 per year. Any adult that can show up for work with pants and shoes on is worth more than $12,600 per year. Any person who has the ability to actually win an election is worth way more than that.

So, automatically, an alderman is making less than his/her value. Just as Billy went to work for Burger King, the aldermen are looking for a way to be paid their worth.

There are several ways to do this. A person might be willing to make less than their worth in the short term, if they believe this will increase what their worth actually is in the long term. Take Wayne Taylor, for example. He was the Ward 4 Alderman, and as an adult was worth more than $12,600 per year. But, his aldermanic seat helped him earn appointment as the Director of The Department of Aging for Anne Arundel County, making (I'm guessing) $125,000 per year. Think of how easy his job must be....all he has to do is make sure time passes!!!! Here is the checklist for the director of the department of aging:

1. make sure sun rises in the east
2. make sure all clocks have good batteries
3. oversee calendar industry
4. earn $125,o00 per year

Can we blame the aldermen for wanting to do the same thing? You mentioned the bills about toy guns, plastic bags, slavery, etc. Well, the aldermen do these things to get their names known so they can run for mayor, county council, or delegate and at least earn close to what they are worth! As aldermen, they have to buy their own stationery for goodness sake. Although I have no evidence to support the following claim, Alderman in the City of Annapolis has to have the fewest professional resources of any elected position.

And the mayor.....the mayor makes about half of what her department heads make...and they are her subordinates! If you are the mayor, either the non-monetary aspects of the job are valuable enough to attract you to the job, or you are trying to increase your worth for the future.

As for raises based on performance, let's take a step back. Remember, the goal of compensation is to pay the worker what he/she is worth. The theory of a merit-based raise assumes that the level of compensation was previously correct, then examines performance as a way to see if the value of the worker has increased. If it has, then a raise is given to keep the worker's pay in line with his/her worth.


Good grief, I need some more coffee.

Anyway, there is something we can do about this:

-wait until the time dictated by the current charter to determine pay for the next council
-get serious about paying more money
-since the new aldermen are paid what they are worth, they will (hopefully) worry about city business and not the stupid bills you talked about
-think about having a city manager form of government