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Making the Big Bucks in State Government

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Thursday, April 3rd, 2008
Baton Rouge, Louisiana

STAND UNDER THE ARCH TO EARN THE BIG BUCKS
IN STATE GOVERNMENT

How do you put a dollar value on the worth of a public official? That’s the issue being debated in the Baton Rouge State Capitol this week. The new Economic Development Secretary is asking approval for a salary of $320,000 a year. His assistant is requesting a salary as deputy secretary of $235,000 a year. These amounts are significantly above what other economic development directors are making throughout the South. So how do you justify such large increases?

Is such a high salary a “Hail Mary pass” in a desperate effort to try to do some catching up economically in Louisiana? Or is there a sound justification for paying the state quarterback for economic development that kind of money? And how about this idea? Shouldn’t receiving such large salaries be based on results?

LSU football coach Les Miles will pocket some three and a half million dollars this year, making him one of the highest-paid football coaches in the nation. He received such an enormous salary package based on results. It’s the old adage that you get what you pay for, and with Miles, Louisiana ended the football season with a national championship.

Stephen Moret, who is requesting this major salary increase, says he will work seven days a week. But a lot of people work that hard. Should time and work be the only criteria in paying public employees? Why not pay the governor, the secretary of economic development, the superintendent of education, and a cross section of other public officials that directly affect our lives, based on a scale of how well they perform and what results they achieve?

It seems like someone is always giving the re-assurance that comes from the bogus public versus private sector comparisons. Fortune 500 CEOs make on average $10 million. So some would argue that paying the Governor of Louisiana $125,000 a year to oversee a $30 billion enterprise is a real bargain! But what about results?

Experimentation with performance pay in the public sector is on the grow. A New York City charter school is promising to pay teachers $125,000 a year, plus bonuses based on classroom and school-wide performance. Sure, this is a lot of money, but those in charge are looking for a significant increase in student performance levels. Bottom line — results.

All of this aside, the heart of our query is about pegging the pay of the governor and his top assistants to performance. I would surmise that most voters in Louisiana would think it’s a good idea, but how do you do it? When you talk about results, it is certainly easier to define in the private sector. Results are measured in the stock price of a publicly traded company or by profit in any other company. The more the company makes, the more its managers can earn.

But can you create an accountability and production index in government? I think you can. This would be a challenge for key economists at Louisiana universities. Develop a formula that would give a “performance index.” Sounds difficult, but why not give it a try?

I suggest starting with the “misery index” we’ve heard so much about. This so-called misery index, you may recall, is the sum of the Louisiana unemployment rate added to the state’s inflation rate. Go ahead and pay Gov. Bobby Jindal and his brain trust the big bucks. The governor should make $1 million a year. But this amount would be adjusted by the misery index. Right now, the index is a relatively low 8%, so Jindal’s salary would be close to what he now makes: $125,000. Remember you divide the whole number, not the percentage. So if we look back to 1980 when Dave Treen was governor and the misery index was up to 22%, he would have been making less than $40,000 a year.

Now this should just be the beginning. As Governor Jindal often tells us, future economic growth in Louisiana is tied to job skills through education. Therefore, we should build into the formula increases in high school math performance, elementary student test results, reduction in the state’s troubling pollution levels, and maybe the number of new movies that are shot in Louisiana each year. Leave out the LSU national football ratings, but include the student athlete graduation rates.Finally, I would factor in consumer confidence. Are the voters getting tangible results? Are they happy with the performance of their top public officials? If you own shares of stock, and have little confidence in your company investment, you simply sell the stock. The average Joe ought to be able to put in his two cents worth as to the value he’s getting out of Louisiana government. Get his opinion through a statewide poll, and factor the results in to the performance index.

So to Stephen Moret and other top officials working for the Louisiana Governor, I say make your case and ask the salary level you think you are worth. But just like in the private sector, be prepared to defend the bottom line. The proof of course is in the pudding. Be accountable for the results that take place. And if you succeed, reap the benefits.

In ancient Rome, there was a tradition when major projects were built. Whenever a Roman engineer constructed an arch, as the capstone was hoisted into place, the engineer assumed accountability for his work in the most profound way possible. He stood under the arch.

So pay these pied pipers of change and economic growth the big bucks they say they are worth. But keep them directly under the arch of performance, and let voters know there will be a day of reckoning if this promise of change and results plummet to the ground.

******

“Effective leadership is not about making speeches or being liked;
leadership is defined by results not attributes.”
– Peter Drucker

Peace and Justice.

Jim Brown

4 Responses
  1. JOE REYNOLDS

    Of course you are right, but would government employees go for it. Maybe the voters ought to make them go for it. We are the ones paying.
    If I pay your salary, why can’t I determine if you are worth it or not?

  2. Kent Payne

    Very good points, Jim. Also, it seems like Louisiana’s economic development efforts are driven by the grant of tax incentives. A few years ago, two Louisiana Tech professors published a study that cast doubt on whether these incentives result in job growth. Also, it cast doubt on whether these incentives are cost effective. Other studies suggest that much of the growth would have occurred with or without tax incentives.

    We spend a lot of money on economic development, but do we closely monitor the results?

  3. HARDY PARKERSON

    Why pay Les Miles $3-Million a year just because the players won the National Championship! The players are the ones who do the work. They should be getting paid. Exploiting college football players is a type of modern day slavery. The players do the work, and the ones who run the athletic departments get the money. The LSU football players need to go on strike. Then you’d see Les Miles’ salary drop and see the players get more of the money that a university football team brings in. There is more to it all than this, but this is something to think about.

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