Tuesday, July 11, 2017
This Article analyzes the institutional design of city council compensation procedures and unpacks the normative concerns surrounding the pay of elected leaders of our cities. How much of "other people's money" should city councils be paid? Should city councils decide their own pay? Should voters? Should the state legislature?
The Article contends that existing compensation procedures – such as city council control and mandatory voter referenda – distort compensation outcomes. Where procedures enable financial self-dealing, standards manipulation, or the under-accounting of non-salary compensation, overcompensation is the likely result. Conversely, where procedures enable reelection rent-seeking, election pathologies, or reverse ratcheting, undercompensation tends to result. Neither outcome is desirable: overcompensation increases burdens on taxpayers and risks elected officials motivated more by pecuniary incentives than civic duty, while undercompensation can result in elected office being open only to those wealthy enough to afford it and produce a less effective and accountable government. To address these concerns, the Article advances a prescriptive framework to improve the institutional design of city council compensation procedures, and explores the unique second-order institutional design questions of state versus local control over city council compensation.
While compensation amounts are not necessarily determinative of quality of governance, compensation procedures affect who governs our cities. And who governs our cities matters because our cities matter. Cities are responsible for an significant share of public goods and services, and in the face of federal deadlock, cities are increasingly engaging in innovative policymaking on issues like climate change, civil rights, and consumer protection. By better understanding the impact of compensation process on compensation outcomes, we can better understand the future of our cities.